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Nissan exits Russia amid Ukraine conflict, sells subsidiary for one euro

Nissan exits Russia amid Ukraine conflict, sells subsidiary for one euro

Nissan says it expects to lose more than 100 billion yen ($AU1.1 billion) by selling its Russian division – which has not built a single car since March, due to the conflict in Ukraine – to a government-owned institute for one euro.

Japanese car-maker Nissan is exiting the Russian market, selling its local subsidiary to a state-owned institute for just one euro ($AU1.55) – seven months after pausing production due to a lack of parts caused by the war in Ukraine.

In March 2022, Nissan’s Russian division – officially known as Nissan Manufacturing Russia LLC (NMGR) – suspended operations at its St Petersburg plant due to parts supply disruptions caused by Russia’s invasion of Ukraine.

In a media statement, the company announced it will transfer its shares in NMGR to the Russian state-owned Central Research and Development Automobile Engine Institute (NAMI for short, derived from the institute’s name in Russian) for €1 ($AU1.55).

Nissan’s factory in Saint Petersburg, Russia

NAMI is the same firm which purchased the 68 per cent stake in Russian car-maker AvtoVAZ (parent company of Lada) from French company Renault – coincidentally part of an alliance with Nissan and Mitsubishi – just ₽1 (1 ruble) in April 2022, or approximately $AU0.02 at the time.

Nissan said it expects it will incur an “extraordinary loss of approximately 100 billion yen” – about $1.1 billion in Australian currency – as a result of the sale.

Since opening its St Petersburg factory in 2009, Nissan produced models such as the Murano, X-Trail and Qashqai SUVs for Russia, Kazakhstan, Belarus, Lebanon and Azerbaijan.

Russian President Vladimir Putin speaking at Nissan’s factory in 2016

According to new-car sales data from Marklines, Nissan sold 51,338 cars in Russia last year. 

Between January and September 2022, the Japanese car-maker reported 13,476 cars as sold in Russia.

Nissan’s sale of its Russian division to the state-owned institute includes the car-maker’s St Petersburg factory and research facility, as well as its sales and marketing centre in Moscow – the latter of which will operate under a new name. 

Nissan announced its current Russian employees will be guaranteed employment under the new ownership for 12 months – while the Japanese car-maker also has the option of buying back the business from the Russian institute within six years.

“On behalf of Nissan, I thank our Russian colleagues for their contribution to the business over many years,” Nissan President and CEO Makoto Uchida said in a media statement.

“While we cannot continue operating in the market, we have found the best possible solution to support our people.”

Last month, Japanese car giant Toyota – the world’s biggest car maker by annual sales volume – announced it would be exiting Russia, having suspended local production of the Camry and RAV4 in March.

Jordan Mulach

Jordan Mulach is Canberra/Ngunnawal born, currently residing in Brisbane/Turrbal. Joining the Drive team in 2022, Jordan has previously worked for Auto Action, MotorsportM8, The Supercars Collective and TouringCarTimes, WhichCar, Wheels, Motor and Street Machine. Jordan is a self-described iRacing addict and can be found on weekends either behind the wheel of his Octavia RS or swearing at his ZH Fairlane.

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