Nissan Motor Co. Ltd. chief executive officer Carlos Ghosn delivered a sharp criticism of his company’s Canadian unit, declaring that the auto maker’s 5-per-cent market share is “absolutely unacceptable” and needs to be doubled.
In an interview at the auto maker’s global headquarters in Yokohama, Japan, Mr. Ghosn said he can’t understand why vehicles that have grabbed 26 per cent of the market in Mexico and 8 per cent of the U.S. market have captured only 5 per cent of sales in Canada.
“Our market share is absolutely unacceptable for the kinds of products we are offering in the Canadian market,” he said.
Nissan Canada Inc. and its dealers are responsible for hitting a goal of 10-per-cent market share, he said, which would at least match where the company’s U.S. sales are heading.
“It’s engagement, it’s commitment and I’m talking about the whole team in Canada,” he said, noting that Nissan Canada is trying to address the issue with help from Nissan’s U.S. arm. “I’m not singling out one person. I’m saying the whole team in Canada is not delivering. It’s not.”
Such a public calling out of management is rare in the auto industry, which employs armies of spin doctors to maintain a flow of positive news.
But Mr. Ghosn, who heads the alliance of Nissan and Renault SA, which ranks among the world’s five largest auto makers, is known for his frank talk and for setting aggressive sales and profit targets that, so far, he has met.
“We have all the small products, fuel-efficient [cars] the electric car. We have every single car which is needed by the Canadian market. So you can understand why there is some impatience at the level of the headquarters to see our performance in Canada going up.”
Although it’s far from Mr. Ghosn’s goal of 10-per-cent market share, Nissan Canada has outperformed most other Japan-based auto makers in the Canadian market during a year in which sales by those companies have been battered by a shortage of vehicles because of plant shutdowns caused by the March 11 earthquake and tsunami in Japan.
Nissan Canada president Allen Childs said the company is on track for record sales this year and is focusing on hitting a target of a minimum of 8 per cent of the Canadian market under a global Nissan plan unveiled earlier this year.
“The entire Nissan Canada team is impatient for this growth to occur and at the same time committed to make it happen,” Mr. Childs said.
Nissan Canada said Thursday its sales rose 11 per cent last month to 6,420 vehicles, compared with 5,786 a year earlier, marking its best November yet.
Nissan ranks third among Japanese auto makers behind Toyota Canada Inc. and Honda Canada Inc., but all three have lost market share to Hyundai Auto Canada Corp. and Volkswagen Canada Inc., which have been the strongest performers among the major offshore-based, non-luxury brands this year.
While the Canadian unit is underperforming, Mr. Ghosn said Nissan’s goal of reaching 10 per cent of the U.S. market means more production will be needed in North America beyond the auto maker’s existing plants in Smyrna, Tenn., Canton, Miss., and Mexico.
“There is no doubt on the fact that we will be announcing in the year 2012 increase of capacity in North America,” he said.
That production increase is also caused by the recent surge in the value of the yen, which has rendered imports from Japan uncompetitive in all markets outside Nissan’s home base.
Vehicles will be exported from Mexico, China, Thailand and elsewhere instead of Japan, Mr. Ghosn said. It will not lead to plant shutdowns by Nissan in Japan, but will likely lead to the elimination of shifts at some plants and what he called “a hollowing out” of manufacturing in the world’s third-largest economy.