Nissan Sells Russian Assets Worth $687 Million for $1.40

Nissan Motor Co Ltd will sell its business in Russia to a state-owned firm for 1 euro ($1.40), the company announced on Tuesday, incurring a loss of approximately $687 million in the latest costly exit from Russia by a multinational corporation.

It is stated that the Japanese carmaker will transfer its shareholding in Nissan Manufacturing Russia LLC to the state-owned Nami.

According to Russia’s industry and trade ministry, the agreement grants Nissan the option to repurchase the business after six years. Nissan is the most recent large firm to quit Russia since the deployment of tens of thousands of Russian troops to Ukraine in February.

It also mirrors the action of Nissan’s largest shareholder, the French automaker Renault, which sold its majority ownership in the Russian automaker Avtovaz to a Russian investor in May.

According to the ministry, the sale to Nami will comprise production and development facilities in St. Petersburg and its sales and marketing office in Moscow.

Nissan projected an unusual loss of approximately $687 million but maintained its profit outlook for the fiscal year ending in March.

Renault, which owns 43% of Nissan, anticipated that 331 million euros would reduce its net income for the second half of 2022 as a result of Nissan’s decision.

In March, Nissan halted production at its St. Petersburg factory due to supply chain issues. Since then, the corporation and its local branch have been monitoring the situation, according to the statement.

Nissan stated that there was “no visibility” of a change in the external situation, which led to its decision to withdraw.

The Nikkei daily reported that junior alliance partner Mitsubishi Motors Corp is also considering leaving Russia. A representative for Mitsubishi stated that no decisions had been made.

The two stated on Monday that they were discussing the future of its alliance, exploring an investment in Renault’s new electric vehicle venture.

Two individuals familiar with the talks told Reuters that Renault might sell a portion of its controlling interest in Nissan as part of these discussions, which could result in the largest reorganization of the alliance since the 2018 arrest of long-time boss Carlos Ghosn.

According to Russian reports, Renault sold its stake in Avtovaz for one rouble ($0.02).

Russia’s Industry and Trade Minister Denis Manturov stated that the Nissan contract was “very important for the industry.”