Japan’s Nissan quits Russian market, losing $687m

Japanese automaker Nissan will sell its Russian assets – including a factory in Saint Petersburg – to the Russian government, the industry and trade ministry in Moscow said.

The deal makes Nissan the latest major company to exit Russia since Moscow sent tens of thousands of troops into Ukraine in February.

It also mirrors a move by the French automaker Renault, which sold its majority stake in Renault Russia to Russian investors in May.

Tuesday’s announcement comes after Nissan suspended production at the plant in Russia’s second city in March, shortly after Moscow launched its war on Ukraine.

“Nissan’s executive committee approved the sale of its Russian assets to the Russian Federation … this includes Nissan’s production and research facilities in Saint Petersburg as well as a sales and marketing centre in Moscow,” the ministry said in a statement on Tuesday.

Under the terms of the deal, Nissan “can buy back its share within the next six years”, it added.

According to a report by Reuters, the company will hand over its business for a token 1 euro ($0.97).

Nissan said it will suffer a loss of about 100 billion yen ($687m).

However, it added that its 2,000 or so employees in Russia will receive “employment protection” for 12 months.

According to Nissan’s statement, the firm “remains on track to achieve its business objectives”, as the company assumed zero activity in the market in this fiscal year.

“On behalf of Nissan, I thank our Russian colleagues for their contribution to the business over many years. While we cannot continue operating in the market, we have found the best possible solution to support our people,” Nissan CEO Makoto Uchida said in the statement.

The deal was “of great significance for the industry”, Denis Manturov, Russia’s industry and trade minister, said in a statement.

Japan’s Nikkei newspaper said that junior alliance partner Mitsubishi Motors Corp is also considering exiting Russia.

A spokesperson for Mitsubishi said nothing had been decided.

Other companies which have sold their Russian assets in the automobile industry include British car distributor Inchcape, Italian truck maker Iveco, and French tyre maker Michelin.