Better engagement with local community key to business success amid market slowdown, says its president
Roland Krueger, president of Infiniti Motor Co Ltd, believes listening is the golden rule of managing a successful business.
"Taking the example of building good relationship with dealers, we need to sit down with them and just listen ... We need to understand how we can support them to capture market opportunities," said the 50-year-old auto industry veteran.
That philosophy appears even more important at a time when the automobile market in China suffered an unprecedented slowdown after surpassing the US as the world's largest in 2009. There have also been growing number of cases when the relationships between automobile firms and dealers have turned sour due to shrinking profit margins and squabbles over profit sharing.
In fact, maintaining strong and healthy relationship with dealers has been the cornerstone of Infiniti's development in China, its most important growth market, said Krueger.
The company said its sales in China surged 33 percent year-on-year in the first seven months, while the average growth rate of passenger vehicles sales in China was a meager 3.39 percent during the same period.
Established in the US in 1989, Infiniti is the first premium auto brand based in China after moving its headquarters to Hong Kong in 2012.
Infiniti formed a joint venture with China's Dongfeng Motor Corp in September 2014 and the company's first locally produced car was unveiled at the end of 2014. Since then, the two models, Q50L and QX50, both produced in Xiangyang, Hubei province, have made Infiniti one of the fastest global players to localize production in China.
Looking ahead, Krueger said the long-term ambition for Infiniti, the luxury arm of Nissan Motor Co Ltd, is to become a top-tier player in the premium car sector.
He spoke to China Daily on Infiniti's strategy for business growth. The following are edited excerpts from the interview:
The China Association of Automobile Manufacturers has slashed its full-year sales growth forecast for China from 7 percent to 3 percent. How do you look at the Chinese auto market?
China is the biggest single car market in the world. This also makes it the most important for every carmaker. We have chosen China as one of the key strategic areas to grow.
Nevertheless, it must also be understood that the over-proportional growth figures we saw in recent years will normalize. It will be more of normal growth. And this is what we are experiencing at the moment. We understand the growth figures and work with our dealers to catch up with the market.
Roland Krueger, president of Infiniti Motor Co Ltd.[Zou Hong / China Daily]
What are your business strategies as you adjust to the slower market growth?
The key to success is localization of products and investment into local marketing and brand building.
The other part of sustainable success is a very good and strong relationship with the dealer network.
I personally believe that a strong and healthy network (of dealers) is the basis for strong development of the business. Dealers are an integral part of our business model. Our dealers represent our brand. We want to make sure our dealers invest into the brand and they must be profitable and be motivated. They must see a long term future for their business. So we are working closely with our dealers to address all the issues we can see.
Of course the normalization of this market is part of our discussion with dealers and we are working with them.
With the local products, with the right investment into the right marketing and branding activities, and a very good relationship with our dealers, we believe we are on the right track.
What is the secret to maintaining a healthy relationship with local dealers?
We believe in open and transparent dialogue. Sometimes the market is over-proportionally growing. Sometimes the market is normalizing as we see here today. We need to sit down and discuss about the problem. With dialogue comes transparency, and with transparency, we are able to see things more early and address certain issues where the dealers need support.
Do you plan on expanding your dealership network in China?
We are expanding at the moment. Currently we have 93 outlets and we will have about 100 by the end of this year. Our initial plan was 120 by the end of next year. We will see how fast we can develop this.
Do you plan to expand your localization in China, in terms of production rate and types of localized models?
Yes, of course. We are in discussions. But let us establish the current cars first. We started local production in November with the Q50L and then in March the QX50 subsequently.
Infiniti hybrid cars parked outside the Diaoyutai State Guesthouse in Beijing. [Photo provided to China Daily]
What do you think is an effective leadership for a company to be successful in China?
The first answer is to listen carefully. Our business partners, mainly dealers, have entrusted their investment in our brand. It is our duty to make sure that the investment pays off. We need to listen to those dealers and understand how we can support them to capture the market opportunities.
The second step would be to embrace diversity. Within a reasonably small team in Hong Kong, we have 21 nationalities. We have people from all over the world, from very different backgrounds, joining us and managing the business. This is an opportunity where we can capture cultural differences and certain topics that are important for marketing or the brand. And at the same time, it is a host of new ideas. Embracing diversity means that you are open to new ideas. We want to share and we want to make sure that everyone can contribute. I think this will be one of the strengths of this global brand set up.
What would you share with young people on how to run a successful business?
Be prepared. If you are running a business, or you want to set up a business, make sure you are prepared.
Not that you can prepare for everything. But if you are well prepared, those unforeseen things will not throw you off the direction because you know exactly where you are moving.
What is also important is focus and accountability. Focus on what you need to achieve. Make yourself and everybody else in the team accountable for his or her responsibility.
You started your career in the auto industry as an interior and exterior designer. How does that background help you become a successful corporate leader?
That's a question you would have to ask my team. (Laughs) But what is important for me is that I'm very much into cars. I sketch cars. I design cars. It's just a great profession to work with cars.
Do you still sketch cars nowadays? Is it a hobby for you?
Sure. It's both. It's part of my life.
What cars do you own?
At the moment I have a Q70L and a Q50.
What's your favorite sport? And why?
Running. I run a lot. There are many reasons. First of all, it's really healthy. It keeps you fit. It is also a good way to think about things, without stress.
1992: Bachelor's degree in industrial design from the University of Applied Science in Munich, Germany
1998: MBA Degree from INSEAD in Fontainebleau, France
Jan 2015 onwards: President of Infiniti Motor Co Ltd and senior vice-president of Nissan Motor Co Ltd;
2013: Senior vice-president of BMW Group and regional head of operations for Germany;
2008: President and CEO of BMW Group, Japan
Contact the writers at firstname.lastname@example.org and email@example.com
Liu Yixi contributed to this story.
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