2012 Infiniti FX

2012 Infiniti FX

After announcing late last year that it was moving its global headquarters to China, Infiniti has now confirmed that it will also start production in the world’s most populous nation commencing in 2014.

Infiniti states it will build two models in China though is yet to reveal which models they will be.

The models will be built at a plant run by Infiniti’s parent company Nissan and its Chinese partner Dongfeng.

Speaking at today’s confirmation announcement, Infiniti boss Andy Palmer said, "This is an important milestone for Infiniti's growth strategy, and for the brand to reach its aggressive sales target of 500,000 units by 2016, local production in the world's largest automobile market is not an option but a necessity to our success."

Further details regarding the new production program will be announced at a later date.

Infiniti, which was first launched in China in 2007, is the latest in a string of luxury automakers starting production in China. Most of Germany’s major automakers already have a production base in China and just this month Cadillac was reported to be adding production of the ATS, XTS and next-gen CTS in China as well.

There are many benefits to the diversification of production bases; moving production to areas where the bulk of models are sold not only helps with logistics, meaning cars can be delivered to customers faster, but it also hedges against currency fluctuations and may lead to lower production costs, especially if a plant is established in low cost countries such as China or Mexico and close to suppliers. In fact, the trend is already accelerating, with this week Audi also announcing the establishment of a new plant in Mexico to serve the North American region and possibly worldwide markets.