After suspending operations in March, Nissan has announced its formal exit from the Russian market which the company said will have a “one-off impact of approximately 100 billion yen” – equating to roughly R12.43 billion.
The Japanese manufacturer has sold all of its business units in Russia to NAMI, the country’s Central Research and Development Automobile and Engine Institute.
“The sale will transfer all Nissan operations in Russia under the Nissan Manufacturing Russia LLC (NMGR) legal entity to NAMI for future passenger vehicle projects,” said Nissan’s executive committee.
“This covers Nissan’s manufacturing and R&D (research and development) facilities in St. Petersburg, and Sales & Marketing centre in Moscow, which will operate under a new name.”
Under new ownership, Nissan has assured that all of its former employees will receive employment protection for 12 months.
Additionally, according to the terms of the sale which are scheduled to be finalised in the following weeks, Nissan will be given the opportunity to buy back the entity and all operations within the next six years.
The automaker said despite the substantial financial hit it will endure, it remains on track to achieve its business objectives for the year.
A mass exodus of car manufacturers
Nissan is the latest in a substantial line-up of automakers who have either suspended operations or completely withdrawn from the Russian market in 2022.
Renault sold its majority stake in AvtoVaz, maker of Lada, to NAMI in May for a “symbolic” amount, though it was reported that the figure was a mere 25 cents.
Toyota, the world’s biggest car manufacturer, followed suit just recently by stopping the assembly of vehicles at its single Russian factory.
Stellantis – which owns Alfa Romeo, Citroen, Fiat, Jeep, Peugeot, and more – has also upended activities in the Eastern European region; in addition to VW, Suzuki, Mercedes-Benz, Hyundai, Ford, and Volvo, reports TechCrunch.
According to Bloomberg, only two out of the more than 20 auto factories that were active in Russia before it invaded Ukraine in February are still in operation, a state-owned one and a Chinese one.
This has seen car sales in the country drop by as much as 84% to under 25,000 units per month.
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