Nissan Motor Co. Ltd. announced on Tuesday that it will sell its operations in Russia to a state-owned company for 1 euro ($0.97), incurring a loss of around $687 million in the latest pricey outflow of a major corporation from the nation.
According to the statement, the Japanese carmaker transferred its ownership of Nissan Manufacturing Russia LLC to state-owned NAMI. According to the Russian Ministry of Industry and Trade, the agreement will allow Nissan the option to acquire back the company after six years.
Nissan will now be the most recent significant corporation to quit Russia since Moscow put tens of thousands of troops into Ukraine in February as a result of the arrangement. It also echoes a move made by Renault, the largest stakeholder in Nissan, which sold a Russian investor its majority ownership in the Russian automaker Avtovaz in May.
Nissan’s production and development facility in St. Petersburg and its sales and marketing center in Moscow will both be sold to NAMI, the ministry said. Nissan reaffirmed its earnings projection for the fiscal year that ends in March but said it anticipated an exceptional loss of about 100 billion yen ($687 million).
Due to supply chain issues, Nissan had to halt operations at its St. Petersburg facility in March. The business and its local affiliate have been keeping an eye on the situation ever since, it claimed. Nissan claimed that there was “no visibility” of an alteration to the exterior environment, which led it to choose to leave.
According to the newspaper, junior alliance partner Mitsubishi Motors Corp. is also thinking about leaving Russia. According to a Mitsubishi representative, nothing has been decided. The departure occurs as Nissan and Renault are beginning a significant change in their partnership. The two companies announced on Monday that they were in discussions about the future of their partnership, with Nissan expressing interest in funding a new Renault electric vehicle initiative.
The potential of Renault selling some of its controlling interest in Nissan was also discussed in those negotiations, according to two people with knowledge of the discussions, which could result in the alliance’s greatest reset since the arrest of longtime boss Carlos Ghosn in 2018.
For one rouble ($0.02), Renault reportedly paid to sell its ownership in Avtovaz.
Denis Manturov, Russia’s minister of industry and trade, stated in a statement that the Nissan agreement was “of tremendous significance for the industry.”
