Nissan Has Officially Pulled Its Business Out Of Russia After Ukraine Invasion
When Russia invaded the country of Ukraine earlier this year, Nissan halted all production of cars in its country. This was supposed to start back up again in September, but this month Nissan confirmed that it would continue its standstill until the end of the year. Now, however, the manufacturer has confirmed that it was be removing itself from the Russian market altogether.
Nissan will be halting all operations under Nissan Manufacturing Russia LLC (NMGR), which we be sold to NAMI (abbreviated from Central Scientific Research Automobile and Automotive Engines Institute). This will include both the manufacturing plant and R&D departments found in St. Petersburg, but also the Moscow-based sales and marketing centre.
Employees that are affected will be receiving compensation equal to 12 months of their salaries as the sale is fulfilled over the next few weeks. Nissan has admitted that this will cost a total of around 100 billion yen, which is about $686,455,000 USD. This is a huge move from Nissan, but the Japanese marque is still covering its back by including a clause in the sales contract which allows Nissan to buy everything back within 6 months if it chooses to do so.
So if Russia backs out of the war – or if Nissan does believe this is the wrong business move – it can be reversed.
Nissan has been in Russia since building its plant in 2009. The cars that exit the plant include the Qashqi, Murano, and the X-Trail, and the factory actually set a record output of 56,525 vehicles in 2018.
Nissan President and CEO Makoto Uchida 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.”
Renault also did the same thing earlier this year where it sold almost 70% of its stake in Avtovaz, the company behind the famous car manufacturer Lada. Like Nissan’s sale, it sold the stake to NAMI and is also protected by a clause which gives the French company the ability to buy it back within the next six years.