Nissan's Infiniti says to hit operating margin goal

FRANKFURT Wed Sep 11, 2013 10:01am EDT

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FRANKFURT (Reuters) - Infiniti, the luxury brand of Japanese carmaker Nissan (7201.T), will meet its operating profit margin target this fiscal year, its president said, reversing years of low profitability when exported cars suffered from a strong yen.

A weaker currency, and a low depreciation charge, would help the brand to offset the launch costs of its new mid-sized Q50 model, Johan de Nysschen told Reuters in an interview at the Frankfurt motor show on Wednesday.

He expected the brand to achieve its target for an operating profit margin of 6-7 percent in the year ending March 2014.

"A fair bit of that is coming from the weak yen," he said, adding he also saw strong sales volumes in the second half.

Nissan CEO Carlos Ghosn set a new profit target in May for Infiniti, which in recent years has hardly contributed to the Japanese automaker's operating profit as it struggled to export profitably with a persistently strong yen.

Nissan's own operating margin was 5.4 percent last year.

De Nysschen said he saw Infiniti's operating profit margin exceeding 10 percent by the end of the 2022 fiscal year, and the brand selling 500,000 cars.

Infiniti sold 172,000 cars last year.

Nissan's investment program to the end of this decade "probably represents the biggest and most comprehensive investment program in Nissan's history," he added.

De Nysschen's mandate is to make sure that while Nissan funds the brand's substantial cash needs, it is not a burden on Nissan's consolidated profit.

The Japanese automaker's plan to turn Infiniti into a major global premium brand hinges on production in Europe and China, backed by an expanded range of models and engines, some developed in a partnership between Daimler (DAIGn.DE) and the Renault-Nissan alliance.

Infiniti is in very early exploratory talks with Daimler's Mercedes brand about other vehicles beyond its current small car platform, which underpins the luxury compact C30 that Infiniti showed in Frankfurt.

(Reporting by Christiaan Hetzner and Jennifer Clark; Editing by Marilyn Gerlach and Mark Potter)

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