Nissan, Treading Boldly, Plans New Infiniti SUV

Nissan Motor Co., displaying a new confidence gained in its alliance with Renault of France, said Monday that it is preparing a high-performance sport-utility vehicle for its Infiniti luxury division to compete with the Mercedes-Benz M-Class, the Lexus RX 300 and the forthcoming BMW X5.

The still-unnamed Infiniti, expected to hit U.S. showrooms by mid-2002, will be the second sport-utility for the luxury division. It will be smaller than the existing QX4--which is an upscale version of the Nissan Pathfinder--and will probably have a suspension system that will be more at home on the highway than climbing over rocks.

The decision to build a smaller luxury SUV “is a smart one for Nissan,” said Thad Malesh, senior consultant at automotive marketing specialist J.D. Power & Associates in Agoura Hills.

“Sports cars and sports-performance SUVs are the one-two punch for the early 2000s,” he said. “By announcing this [SUV] now, Nissan is demonstrating that instead of the knee-jerk reacting to market conditions that it has been doing, it now has the confidence and resources to look to the long term.”

The No. 2 Japanese auto maker wants to boost annual Nissan sales in the U.S. to 1 million and sales of Infiniti to 150,000. It is looking to products such as the popular new Xterra SUV and a 2002 version of the Z sports car to help it get there.

The company sold 557,879 Nissans and 63,649 Infinitis in the U.S. last year. Nissan’s 1999 sales through July rose 7.8% to 380,794 units to position the brand for its first year-to-year increase in four years.

In addition to the Infiniti SUV--which a Nissan spokeswoman described Monday as “a sports car [and] luxury SUV,” the company continues to study the feasibility of an Infiniti-brand sports car to compete with vehicles such as the BMW Z3 series, the Mercedes-Benz SLK and the Lexus SC.

Nissan’s American depositary receipts, each worth two ordinary shares, rose 38 cents to close at $11.88 on Nasdaq.