Nissan Mexico announced that they will lay off around 1,000 workers at its two Mexican factories, citing “challenging market conditions”.
Nissan hasn’t determined yet how the cuts will be distributed between the Cuernavaca and Aguascalientes manufacturing facilities, Reuters reports. However, the company has already begun laying off people in Aguascalientes.
Nissan’s director of corporate communications Brian Brockman said that the Japanese car maker will adjust its production levels “in response to challenging market conditions in Mexico.” The company’s decision to lay off the workers is caused by a“decline suffered by the Mexican automotive industry,” driven by an increase in the cost of raw materials, among other reasons, Nissan said.
Last May, Nissan said that they would reduce their production output in North America by up to 20 percent, as a response to their declining profitability in the US, which is the top market for the company.
Nissan has been producing the Versa sedan in Aguascalientes, as well as the Infiniti QX50, with the company building vans like the NV200 in Cuernavaca.
Nissan is being hit by weak sedan sales, with the Versa being down 30.7 percent from January through November in the US, compared to the same period last year. In total, Nissan’s North American sales are down by 8.4 percent during the second quarter of 2018.