Nissan will sell its business holdings in Russia to a state-held entity for the token price of 1 euro after being forced to cease production in the country.
The transfer will cost Nissan Motor Co Ltd an estimated 687 million in USD, but the agreement gives Nissan the right to buy back the company within six years, according to Russian’s ministry of trade and industry.
Back in March, weeks after Russia invaded neighboring Ukraine, supply chain issues forced production to stop in Nissan’s St. Petersburg plant. In the months since then, the company has monitored the situation, hoping for an opportunity to re-engage production. But the war begun by Russia, which has interfered with supply chains the world over, is not de-escalating. So the decision was made to exit the country.
The Nissan St. Petersburg factory has operated since 2009, and makes on average 50,000 new cars a year. The deal, which transfers ownership of the plant to state-owned NAMI, an automotive development group, also includes Nissan’s research facilities, and their sales and marketing center in Moscow.
Under the deal, all Nissan employees in Russia will have their jobs protected with NAMI for 12 months following the finalization of the sale.
Makoto Uchida, Nissan President, and CEO, said in a statement, “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.”
French automotive company Renault, which is partnered with Nissan, made a similar move in May, selling its majority shares in Russian carmaker Avtovaz to another Russian entity for one ruble, or approximately $0.02 USD. Nissan and Renault have not commented if they will be buying back their Russian holdings in the future. They are instead talking about a joint venture into all-electric vehicles, with Nissan funding Renault development.
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