Nissan bows out from Russian market

Updated Oct 12, 2022

Same topic: Automotive Industry Updates

The company will be selling its operations to the Russian government.

Japanese automaker Nissan has joined the list of car brands that have announced their exit from Russia, following the country’s invasion of Ukraine earlier this year.

Nissan is selling off its Russian operations to the country's leading scientific organization in the automotive industry 

In a statement, the company said that its Executive Committee has approved the sale of its Russian operations to the Central Scientific Research Automobile and Automotive Engines Institute (NAMI), Russia’s leading scientific organization in automotive industry development. 

The transfer covers Nissan’s manufacturing and R&D facilities in Saint Petersburg, along with Sales & Marketing in Moscow. Once completed, these will be operating under a new name. 

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

The automaker's Saint Petersburg production facility manufactured a record 56,525 vehicles in 2018

Nissan Manufacturing Russia LLC (NMGR) has suspended operations in the country since March 2022 following the start of the Russia-Ukraine conflict. With the announcement, the company will be giving out up to 12 months’ worth of compensation to affected employees, apart from maintaining its full-year guidance.

The automaker expects that its pullout from Russia will have a one-off impact of 100 billion yen (nearly Php 40.3 billion). However, Nissan also has the option to buy back its Russian operations within the next six years, hinting at a possible return and resuming ownership of the corporate entity until 2029.         

Nissan will have the option to buy back its operations in the country until 2029

Nissan’s alliance partner Renault also previously announced its decision to leave Russia, selling its 67.7 percent stake in Avtovaz to NAMI in May 2022. Like its Japanese affiliate, Renault also retains the right to buy back its share in the next six years. 

Other Japanese marques have been packing their bags as well. Japan’s biggest automaker, Toyota, ended production at its Saint Petersburg facility in September after six months of suspending operations. Mazda is also reportedly in talks with its Russian partner Sollers to withdraw from the market, although it has not set a timeframe for ending production, car sales, and maintenance support for Russian customers as of this writing.

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Joseph Paolo Estabillo

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Joseph holds a degree in Journalism from the University of the Philippines Diliman and has been writing professionally since 1999. He has written episodes for CNN Philippines' motoring show Drive, and has worked on corporate projects for MG Philippines and Pilipinas Shell. Aside from being Philkotse.com’s Content Lead, he also writes content for numerous car dealerships in the U.S., spanning multiple brands such as Alfa Romeo, Chrysler, Dodge, Jeep, and Maserati, among others.

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