Japanese automaker Nissan said Tuesday that it would sell its assets in Russia to a state-owned company, joining dozens of other global companies in exiting the country over its ongoing invasion of Ukraine.
Nissan will sell its local operations, including its manufacturing and research facilities in St. Petersburg and sales center in Moscow, to NAMI, Russia’s Central Research and Development Automobile and Engine Institute.
The company said the exit will result in a one-time loss of around ¥100 billion ($678 million), but its full-year guidance will remain unchanged.
Reuters reported that Nissan is selling its assets to NAMI for a €1 ($0.97) token fee. Under the terms of the agreement, Nissan will be able to buy back the business within the next six years.
The sale is expected to be formalized in the coming weeks, pending approvals from the relevant authorities, Nissan said. All of its employees in Russia will be given 12 months of employment protection.
The deal mirrors a move by Nissan’s top shareholder, French automaker Renault, which sold its majority stake in Russian carmaker Avtovaz to a Russian investor in May.
Renault, which owns 43 percent of Nissan, estimated the decision by its Japanese partner would lead to a €331 million ($321 million) hit to its net income for the second half of 2022.Nissan halted production in Russia in March due to supply-chain issues. The automaker had been monitoring the situation, but there had been “no visibility” of a change to the external environment, it said, leading to its decision to exit.
These firms include South Korea’s Hyundai, which halted production in Russia, and Japan’s Subaru, which suspended all shipments to Russia. Germany’s BMW has ceased exports and production in Russia, according to the study.
