Nissan Canada Inc. has cut close to 10 per cent of its employees despite a record-setting sales performance.
About 25 people took buyout packages, reducing the number of employees to about 270, Nissan Canada spokesperson Donna Trawinski said.
"We're always trying to be more efficient, more effective, and we're just preparing for the future," Ms. Trawinski said. "Basically it's just normal course of business to try to be as efficient as possible."
The cuts were effective last month, which was the single best month for vehicle sales in the company's history in Canada and followed a 14.5-per-cent jump in sales last year to 76,446 vehicles.
That figure represented an annual record.
Vehicle deliveries rose another 6 per cent during the first four months of this year.
The cutbacks have surprised industry officials, in part because of the sales performance and partly because two other offshore-based auto makers have adopted the opposite strategy this year.
Both Volkswagen Canada Inc. and Porsche Canada have beefed up their corporate staffs in Toronto and appointed presidents of their Canadian operations who will report directly to head offices in Germany.
Ms. Trawinski said there has been no change in the way Nissan Canada reports back to Japan - it is still done through Nissan North America Inc. of Nashville, Tenn.
As several other auto makers have done in recent weeks, Nissan Motor Co. Ltd. has warned profit will fall this year mainly because of the sharp downturn in sales in the U.S. market.
Soaring gas prices and the slump in the housing market have sent sales skidding.
Nissan recently cut its forecast for 2008 U.S. sales to 15.2 million from an earlier prediction of 15.5 million.
Some industry analysts have trimmed their forecasts even further, projecting that sales will fall to less than 15 million this year.
Nissan said, however, that it expects its share of the U.S. market to remain steady.
The auto maker has already cut production at assembly plants in Tennessee and Mississippi and effectively given up the ghost in the full-sized pickup truck market by reaching a deal with Chrysler LLC that involves the Detroit auto maker building such vehicles under contract for Nissan.
Nissan's sales success in Canada has been driven in part by its Versa subcompact, which has been a big seller as gas prices have soared beyond $1 a litre.
Sales of that car have helped Mississauga-based Nissan vault into sixth spot in Canadian passenger car sales, but its performance on the truck side of the business has actually been better with a 17-per-cent gain.
The company's share of the Canadian market - both Nissan itself and its luxury Infiniti brand - stood at 5.1 per cent at the end of April, which was down from 5.2 per cent during the same period last year despite the increase in sales.
© The Globe and Mail
