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Nissan Motor will sell its operations in Russia to a state-owned corporation for one euro ($0.97), the company announced on Tuesday, suffering a $687 million loss in the country’s latest high-cost exit.
According to the Japanese carmaker, it would transfer its stake in Nissan Manufacturing Russia to the state-owned NAMI. According to Russia’s industry and commerce ministry, the agreement gives Nissan the chance to acquire back the company within six years.
Nissan is the most recent large corporation to quit Russia since Moscow pushed tens of thousands of troops into Ukraine in February.
It also replicates a move by Nissan’s largest shareholder, Renault, which sold its controlling interest in Russian automaker Avtovaz to a Russian investor in May.
Nissan’s manufacturing and development facilities in St. Petersburg, as well as its sales and marketing headquarters in Moscow, will be sold to NAMI, according to the government.
Nissan predicted an unusual loss of around 100 billion yen ($687 million), but maintained its earnings prediction for the fiscal year ending in March.
Renault, which owns 43% of Nissan, calculated that the Japanese partner’s decision will cost them 331 million euros in net income in the second half of 2022.
Due to supply chain difficulties, Nissan halted production at its St. Petersburg facility in March. The corporation and its local unit have been monitoring the situation since then, it added. However, Nissan stated that there was “no sight” of a shift in the external environment, causing it to decide to depart.
According to the Nikkei newspaper, junior alliance partner Mitsubishi Motors is also considering leaving Russia. Mitsubishi’s representative stated that nothing had been determined.
The departure comes as Nissan begins a fundamental transition in its partnership with Renault. The two said on Monday that they were discussing the future of their alliance, with Nissan potentially investing in Renault’s new electric car business.
Those discussions, which may result in the alliance’s greatest reset since the arrest of long-time boss Carlos Ghosn in 2018, have also explored the prospect of Renault selling some of its controlling interest in Nissan, according to two individuals with knowledge of the conversations.
Renault allegedly sold its Avtovaz share for one ruble ($0.02).
Denis Manturov, Russia’s Industry and Trade Minister, said in a statement that the Nissan agreement was “of tremendous significance for the industry.”
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