Japanese Nissan leaves the Russian market by selling assets for less than a dollar

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Japanese automaker Nissan said on Tuesday it would sell its assets in Russia to a state-owned company, joining dozens of other global companies in leaving the country following its ongoing invasion of Ukraine.

Nissan will sell its local operations, including its manufacturing and research facilities in St. Petersburg and its sales center in Moscow, to NAMI, Russia’s Central Automotive and Engine Research and Development Institute.

The company said the exit would result in a one-time loss of around 100 billion yen ($678 million), but its full-year guidance would remain unchanged.

Reuters reported that Nissan was selling its assets to NAMI for a token €1 ($0.97). Under the terms of the agreement, Nissan can acquire the company within the next six years.

The sale should be formalized in the coming weeks, pending approvals from the competent authorities, Nissan said. All of its employees in Russia will enjoy 12 months of job protection.

“Although we cannot continue to operate in the market, we have found the best possible solution to support our employees,” Nissan Chairman and CEO Makoto Uchida said in a statement.

The deal reflects a move by Nissan’s largest shareholder, French automaker Renault, which sold its controlling stake in Russian automaker Avtovaz to a Russian investor in May.

Renault, which owns 43% of Nissan, estimated its Japanese partner’s move would result in a 331 million euro ($321 million) drop in net profit for the second half of 2022.

Nissan halted production in Russia in March due to supply chain issues. The automaker was monitoring the situation, but there had been “no visibility” of a change in the external environment, he said, leading to his decision to pull out.

More than 1,000 major companies have reduced their operations “to some extent” in Russia following its invasion of Ukraine, according to a study by Yale University School of Management and the Chief Executive Leadership Institute.

These companies include Hyundai of South Korea, which has halted production in Russia, and Subaru of Japan, which has suspended all shipments to Russia. Germany’s BMW has ceased exports and production in Russia, according to the study.

Reuters contributed to this report.

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Aldgra Fredly is a Malaysia-based freelance writer covering Asia-Pacific news for The Epoch Times.

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