Nissan Motor Co <7201.T> said on Sunday it aimed to boost its sales in Japan in a move that would also help reduce exports by as much as a third and reduce the impact of the yen's crippling strength.

The dollar's plunge below 80 yen to near record lows has hit profits at Japanese automakers such as Nissan, which exported 610,000, or 57 percent, of its domestically produced vehicles last year.

Despite the headwinds from tough exchange rates, high labor costs and risks of disruption from earthquakes, Nissan has vowed to keep production of at least 1 million vehicles a year in Japan to protect jobs and hone its manufacturing expertise.

By selling more cars in Japan and building more vehicles for other brands under original equipment manufacturing (OEM) deals, Nissan aims to boost production of vehicles sold locally in Japan from 460,000 vehicles last year to 600,000, Executive Vice President Hiroto Saikawa said.

That would help the ratio of exports out of Japan fall to as low as 40 percent, he said, without specifying a time frame.

Nissan is Japan's No.2 brand with 13 percent of the world's third-biggest auto market dominated by Toyota Motor Corp <7203.T>. In the business year to end-March 2011, Nissan sold 600,202 vehicles in Japan, of which 24 percent were Nissan-badged 660cc minivehicles built by other Suzuki Motor Corp <7269.T> and Mitsubishi Motors Corp <7211.T>.

Despite being Japan's No.2 brand, Nissan had just two models in the list of 10 best-selling vehicles last year excluding 660cc microcars, trailing Toyota with five and Honda Motor Co <7267.T> with three.

To beef up its sales, Nissan was developing a new compact car that it hopes will make the top-10 list, Saikawa said, and eventually sell enough Leaf electric cars to join the top 20.

Nissan said earlier this year it would start U.S. production of its Infiniti JX sport utility vehicle in 2012 to move more manufacturing away from Japan, following a decision to also shift output of the Rogue SUV to the United States.

(Reporting by Chang-Ran Kim; Editing by Ron Popeski)

Japan