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).
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.
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.