Nissan Motor Co. Ltd. said on Tuesday that it will sell its business in Russia to the state for one euro ($0.97), after incurring a loss of approximately $687 million and leaving the country months after being forced to halt production there.
The Japanese company transfers the shares of Nissan Manufacturing Russia LLC to the state-owned NAMI. The agreement gives Nissan the right to buy back the company within six years, the Russian Ministry of Industry and Trade announced. The deal makes Nissan the latest major company to leave Russia since Moscow sent tens of thousands of troops to Ukraine in February.
It also reflects a move by Nissan’s biggest shareholder, French carmaker Renault, which sold a majority stake in Russian carmaker Avtovaz to a Russian investor in May.
The sale to NAMI includes Nissan’s production and research facilities in St. Petersburg and a sales and marketing centre in Moscow, the ministry said.
Nissan said it expected an extraordinary loss of about 100 billion yen ($687 million) but left its profit forecast unchanged for the fiscal year ending in March.
Renault, which owns 3% of Nissan, predicts that the Japanese partner’s decision will cost it 331 million euros in net profit in the second half of 2022. Nissan was in St. Supply chain disruptions halted production at the Petersberg plant. Since then, the company and its local unit have been monitoring the situation.
However, Nissan said there were no obvious changes in the external environment, so it decided to withdraw.
The junior alliance partner, Mitsubishi Motors Corp., is also considering leaving Russia, the Nikkei newspaper reported. According to a Mitsubishi spokesperson, nothing has been decided.
The exit comes as Nissan begins major changes to its relationship with Renault. They said on Monday they would discuss the future of their alliance, including Nissan’s consideration of Renault’s new electric vehicle project.
The talks, which could trigger the alliance’s biggest setback since the arrest of longtime leader Carlos Ghosn in 2018, also included the possibility of Renault selling part of its majority stake in Nissan, two people familiar with the talks said. Reuters.
Renault reportedly sold its stake in Avtovaz for one ruble ($0.02).
The Nissan deal was “very important for the industry,” Russian Industry and Trade Minister Denis Manturov said in a statement.