Nissan sells Russian operation for one Euro

NISSAN’s Executive Committee has approved the sale of its Russian operations to state-owned NAMI – the Central Research and Development Automobile and Engine Institute – for one Euro ($A1.60).

The move, a result of the Russia-Ukraine conflict and zero activity since March, will see the transfer of all Nissan Manufacturing Russia LLC manufacturing and R&D facilities in St Petersburg, as well as its sales and marketing centre in Moscow, to NAMI.

Nissan suspended manufacturing in March, resulting in zero activity in the market this fiscal year, but Nissan says that despite this it is still on track to achieve its business objectives under the Nissan NEXT transformation plan in-line with its Ambition 2030 goals. 

The terms of the deal, expected to be formalised in the coming weeks, would give Nissan the right to buy back its Russian operation within six years, although it isn’t clear whether that is for the same price.

Nissan said in an official release, that it will take “a one-off impact of approximately 100 billion yen from this exit” which is the equivalent of more than one billion Australian dollars, for perspective.

“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,” said Nissan President and CEO Makoto Uchida.

Nissan’s industry alliance partner and major shareholder (43 per cent), Renault, announced its plan to exit the Russian market in May, selling its majority stake in Russian car-maker Avtovaz for a reported one Rouble (AUD$0.025) price.

Despite a six year buy back option for the Renault deal, Russia’s minister for trade and industry, Denis Manturov, is reported to have said “the French firm will probably have to stump up more than a solitary rouble” if a buy back was to take place.

Another major Japanese manufacturer to make the move away from Russia, is Toyota, after similarly suspending production.

Toyota’s announcement didn’t specify if it would sell its St Petersburg plant but did say it would close the facility following supply shortages following the invasion of Ukraine. 

It’s no surprise, then, that Toyota also halted production in March, as well as ceasing the import of its vehicles into Russia.

“During this period, we have fully retained our workforce and ensured our facility was ready to re-start production if the circumstances allowed. However, after six months, we have not been able to resume normal activities and see no indication that we can re-start in the future,” Toyota said in an official release last month.