Japanese automaker Nissan sells its Russian assets for less than a dollar
Nissan logo
On Tuesday, the Japanese car manufacturing company, Nissan Motor Co Ltd said that they sold their business in Russia, Nissan Manufacturing Russia LLC to state-owned entity NAMI for one euro ($0.97), incurring a loss of at least $687 million.
This comes months after the company was forced to shut down production in Moscow following the Russian invasion of Ukraine.
On the other hand, Russia’s Ministry of Industry and Trade indicated that the Japanese company will transfer its shares to the state-owned entity and the deal allows the Japanese car manufacturing company to have the right to buy the business back within six years.
This move adds Nissan to the long list of companies that exited Moscow amid the ongoing invasion.
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The sale to NAMI also includes Nissan’s production and research facilities based in St Petersburg as well as the sales and marketing centre in Moscow, said the report by Reuters. This deal was “of great significance for the industry,” said the Russian trade minister Denis Manturov in a statement.
According to Nissan, the production in the St Petersburg plant was halted in March itself due to supply chain issues but the local unit had since continued to monitor the situation. However, there was “no visibility” of change in the external environment which prompted the company’s exit, they added.
The Japanese car manufacturing company also said it expected a loss of at least 100 billion yen ($687 million) but reportedly did not change its earnings forecast for the financial year ending in March, said the report. However, Renault which owns nearly 43% of Nissan said that this decision would lead to a hit of at least 331 million euros to its net income in the second half of 2022.
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This is also being compared to Nissan’s top shareholder, the French automaker, Renault’s move which also sold a majority of its stake to the Russian carmaker Avtovaz, earlier this year, in May. Notably, this also comes as the two companies, on Monday, said that Nissan was considering investing in the new electric vehicle venture by Renault.
(With inputs from agencies)
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