Nissan Motor Co Ltd will hand over its business in Russia to a state-owned entity for 1 euro ($0.97), it said on Tuesday, adding about $687 million in losses in the latest costly exit from the country by a global company.
Japanese automaker Nissan is transferring its shares in Manufacturing Russia LLC to state-owned NAMI, it said. Russia’s Ministry of Industry and Trade said the deal would give Nissan the right to buy back the business within six years.
The deal makes Nissan the latest major company to leave Russia since Moscow sent thousands of troops to Ukraine in February. It also marks a move by Nissan’s top shareholder, French automaker Renault, which in May sold its majority stake in Russian carmaker AvtoVAZ to a Russian investor.
The ministry said sales to NAMI would include Nissan’s production and research facilities in St. Petersburg as well as its sales and marketing center in Moscow.
Nissan said it expected extraordinary losses of about 100 billion yen ($687 million), but maintained its earnings estimates for the fiscal year ending in March.
Renault, which owns 43% of Nissan, estimated its Japanese partner’s decision would result in a 331 million euro loss in its net income for the second half of 2022.
Nissan suspended production at its St. Petersburg plant in March due to supply chain disruptions. Since then, the company and its local unit were monitoring the situation, she said. But there was “no visibility” of the change in the external environment, Nissan said, prompting it to decide to pull out.
The Nikkei newspaper said Junior Alliance partner Mitsubishi Motors Corp was also considering exiting Russia. A Mitsubishi spokesperson said nothing had been decided.
Following the exit, Nissan has embarked on a major change in its relationship with Renault. The two said on Monday they were in talks about the future of their alliance, with Nissan considering investing in a new electric vehicle venture by Renault.
Those talks, which could signal the biggest reset in the alliance since the 2018 arrest of longtime executive Carlos Ghosn, also include the possibility of Renault selling some of its controlling stake in Nissan, said two people with knowledge of the talks. has told Reuters.
Renault reportedly sold its stake in Avtovaz for one ruble ($0.02).
Russia’s Minister of Industry and Trade Denis Manturov said in a statement the Nissan deal was “of great importance to the industry”.
Nissan sells business for one euro as soon as it leaves Russia, this first appeared on BGR India.