Christian Meunier expects the Versa Note and Micra models to take about 25 to 30 per cent of the subcompact market in CanadaKevin Van Paassen/The Globe and Mail
Christian Meunier's first few months as chief executive officer of Nissan Canada Inc. last year were typical of a company that has long been an also-ran in the Canadian market. Sales fell, following a 3-per-cent decline in 2012, when Nissan underperformed during the second-best year for vehicle sales in Canada over all.
But when 2013 sales results came out in January, Nissan's 11-per-cent gain in deliveries led to a record for its own sales amid a record year in the Canadian market.
Those numbers and a 38-per-cent sales surge in January, 2014, give Mr. Meunier confidence the auto maker will hit the 100,000 target that he gave his staff for the company's fiscal year, which ends March 31. More importantly, he believes it gives the Canadian unit the momentum to meet the target of 8 per cent of the Canadian market by 2016, set by the demanding CEO of Nissan Motor Co. Ltd., Carlos Ghosn.
Based on Canadian overall sales of 1.743 million last year, Nissan Canada would have to increase sales by more than 50 per cent by 2016 to meet the 8-per-cent goal.
Nissan's turnaround underscores a fact about Canada's auto market that most car companies understand, but some ignore – it's fundamentally different from the U.S. market. It was a lesson that a succession of Americans who ran the Canadian operations for Nissan didn't seem to learn.
"We treated Canada almost as a part of the United States," Mr. Meunier says. "If I had to summarize what was fundamentally wrong, what was strategically wrong, it was that. We cannot have U.S. products coming into Canada and hope that they will be successful."
That understanding is the biggest difference between the France-born Mr. Meunier and his three U.S.-born predecessors, Nissan dealers said.
"He actually understands that Canada is a country, not a state," says Rick O'Neill, a 35-year Nissan dealer who owns O'Neill Motors Ltd. in St. John's. "No disrespect to my previous presidents, but they were all Americans."
Mr. Meunier also quickly grasped that there are big differences in regional markets in Canada, Mr. O'Neill says.
The differences between the Canadian and U.S. markets – from a Nissan point of view, at least – will become even more pronounced this spring when Mississauga-based Nissan Canada begins selling the Micra, a subcompact car that will not be sold in the United States.
With the Canadian market in mind, Nissan has tweaked the made-in-Mexico vehicle to give it 60-40 split folding rear seats so it accommodates a hockey bag and hockey sticks.
This is not a gamble, given that Canadians bought about 100,000 subcompact cars last year, representing about 13 per cent of the passenger car side of the market.
Mr. Meunier figures the Micra and the Versa Note, the existing Nissan subcompact, can take between 25 and 30 per cent of that market. He won't explicitly say it, but that means sales of about 13,000 units for the Micra because Nissan sold a little more than 12,000 Versa Notes last year.
The issue, he says, will be making sure the prices and content of the cars are different.
The Micra, which will be aimed at entry-level buyers, new Canadians and those now buying used cars, has to be priced much lower than the Versa Note, he says, which is advertised at a base price that brings a monthly payment of $130.
He notes that $99 a month would be a good price, but doesn't know if Nissan can keep the price that low. The price of the car will be announced at the Canadian International Auto Show in Toronto on Thursday.
Among the other changes under Mr. Meunier is a streamlining of the organizational structure. Before he arrived, Nissan's dealers would report to a regional general manager, who would report to a sales director, who would report to a regional vice-president.
The sales director position has been eliminated.
"The chain of command is shorter, the decisions are quicker and the back-and-forth communication is a lot more efficient," he notes.
At the same time, he has made a key appointment, hiring Stephen McDonnell away from his job as director of sales at BMW Canada Inc. as managing director of Infiniti Canada, Nissan's luxury sales division. It's the first time Infiniti has had such a position.
He also knows that Nissan has to become what he calls "a top of mind" brand in Canada, acknowledging that when Canadians think of the top Japanese brands, Honda Canada Inc. and Toyota Canada Inc. come immediately to mind, not Nissan.
"We need to stand for something," he says, "Japanese quality with an exciting edge to it."