The luxury brand's revival depends on this.
Automakers across the world are being forced to make do with what little semiconductor chip supplies they have left. This requires shifting production to more popular and profitable vehicles at the expense of others. The dwindling chip supplies are creating more trouble for brands that were already in recovery mode. Infiniti is one of them.
According to Automotive News, Nissan's struggling luxury brand has been forced to halt production of its best-seller next month. The Infiniti QX50 compact crossover will not be built in June at the company's production plant in Aguascalientes, Mexico. The Q50 sedan will also see its assembly lined idled in Japan for the same time period. But it's the QX50 and the lack of production that's causing concern for Infiniti dealerships.
The luxury crossover accounted for about one-third of the brand's US sales in the first quarter of this year. One Infiniti dealer says they expect to run out of QX50 inventory by the middle of next month. They won't be re-stocked until sometime in July. The QX50 production stoppage comes at a particularly vital time for Infiniti as it works to reverse a years-long sales decline.
Last year, for example, US sales dropped by a very troubling 32 percent - the worst annual decline in the brand's history. The QX50 has become a vital player in the effort to save Infiniti and two other new crossovers. The QX55 and the completely redesigned QX60, the latter pictured below as a concept and in camouflaged pre-production form, are both due to begin sales later this summer or early fall.
But without those chips, neither can complete final assembly. Therefore, Infiniti has no choice but to divide its existing chip supply between these three all-important vehicles for the time being. It's still going to be several more months until chip manufacturers begin delivering sufficient and regular supplies to automakers again, so until then struggling Infiniti and its dealers will have to hang on. Most new examples of the previous-gen QX60 have sold out across the country, meaning dealers will have at least a four-month gap until the redesigned model arrives.
Many dealers have therefore been forced to rely mainly on selling pre-owned vehicles for profits. This strategy works for the time being but it certainly won't in the months ahead.