TOPLINE
Nissan has agreed to sell its Russian business unit to the state-owned automotive institute NAMI for a token sum of €1, the Japanese car maker announced on Tuesday, becoming the latest global automaker to exit Russia amid its ongoing invasion of Ukraine.
KEY FACTS
In a press release, the automaker said the sale includes the entirety of Nissan Manufacturing Russia—including its local manufacturing and R&D facilities in Saint Petersburg and its Sales and Marketing unit in Moscow—which will now operate under a new name.
Nissan said it expects to register a one-time loss of 100 billion yen ($687 million) due to the exit.
The deal is expected to be completed over the next few weeks and includes a clause that would allow Nissan to buy back the Russian unit within the next six years.
Nissan had previously suspended manufacturing and imports into Russia in March.
In a notice sent out to shareholders, the carmaker said it had been “monitoring the situation closely” but saw no “visibility of external environment changing” in Russia, forcing it to announce its exit.
KEY BACKGROUND
Nissan is the latest global automaker to exit the Russian market this year after the country was hit by a bevy of international sanctions following its invasion of Ukraine. Renault—which is a cross-shareholder in Nissan—fully exited Russia back in May after selling its majority stake in Russian carmaker Avtovaz to NAMI. Last month, Toyota announced it was ending all vehicle production at its plant in Saint Petersburg. Despite this, Toyota said it will continue to provide servicing and repairs for vehicles already sold to customers in Russia. In March, Volkswagen announced it was suspending operations at its two Russian factories and halting all imports into the country. A few months, later Forbes Russia reported that the German automaker may be planning to fully exit the country by selling its local manufacturing plants. Other major automakers like Mercedes-Benz and General Motors have also suspended imports and manufacturing in Russia.
TANGENT
Besides automakers many other large multinationals have either halted their operations or fully exited the Russian market. Last month, Pepsi announced it had stopped manufacturing several of its popular soda brands after its local bottlers exhausted their entire remaining supply of flavor concentrates. Pepsi’s chief rival Coca-Cola also stopped manufacturing its soda brands in Russia in August. Several other major food brands like Starbucks and McDonald’s have also exited the country. Major apparel and fashion giants like Nike and H&M have also fully exited the country in recent months.
FURTHER READING
Nissan takes $687 mln loss as sells Russian business for 1 euro (Reuters)
Toyota to exit Russia, terminating auto production and sales (Nikkei Asia)
By Siladitya Ray, Forbes Staff