Nissan Sells Russian Business For Less Than $1 - Suffers Extraordinary $687 Million Loss

Nissan will hand over its business in Russia to the state-owned entity - NAMI (Central Scientific Research Automobile and Automotive Engines Institute) - for just 1 Euro ($0.97). The sale is expected to be formalised in the coming weeks following approvals from the relevant authorities.

The Japanese carmaker will take an extraordinary loss of around 100 billion yen ($687 million) due to its exit from the Russian market. However, Nissan does have the option to back the business within six years.

All of Nissan's Russian operations - Nissan Manufacturing Russia LLC (NMGR) including a car manufacturing and research facility in St. Petersburg and a sales and marketing centre in the capital city of Moscow will be handed over to NAMI as per the deal.

Nissan had stopped production at its St. Petersburg plant back in March due to supply chain disruptions caused by the Russian invasion of Ukraine. Nissan produced SUVs such as the Murano, X-Trail, Pathfinder and Qashqai at its Russian plant which were either sold in the country or exported to various Central and West Asian countries.

Despite Nissan's exit from Russia, the Japanese carmaker has ensured that its employees will recieve employment protection of 12 months under the new NAMI ownership setup.

Speaking about the company's exit from Russia, Nissan President and CEO Makoto Uchida said, "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."

Nissan's alliance partner and biggest stakeholder Renault, which owns 43 per cent of the Japanese carmaker also recently exited the Russian market. Renault sold its majority stake in Russian carmaker Avtovaz (the makers of Lada) to NAMI in May. The majority stake in Avtovaz was reportedly sold for 1 rouble ($0.02). The third member of the alliance - Mitsubishi - is also expected to exit the Russian market soon.

Thoughts About Nissan's Exit From Russia

Nissan's exit from Russia is the latest aftereffect of the Russian invasion of Ukraine. Nissan taking the big loss and exiting the Russian market wasn't unexpected as there has been no change in the unfortunate situation in the area.