Nissan initially stopped production of the car in Russia in March following Russia’s invasion of Ukraine. Operations were supposed to resume in September, but an announcement was made last month about extending the suspension until the end of 2022. That will no longer be a problem as the automaker has now decided to exit the Russian market altogether.
This effectively means all local operations under Nissan Manufacturing Russia LLC (NMGR) will be sold to NAMI, the Central Research and Development Automobile and Engine Institute. This includes not only the manufacturing and R&D facilities in St. Petersburg but also a Sales & Marketing center in Moscow. It will use a different name under the new ownership.
The sale will be formalized in the coming weeks and affected employees will receive compensation equivalent to 12 months of salary. The Japanese automaker said it would take a one-off impact of around 100 billion yen, which makes about $686.455,000 at current exchange rates. It is important to mention that the contract stipulates that Nissan has the option to buy back everything within the next six years, so it may be able to return to Russia and reclaim ownership of the entity and operations until 2029.
The decision follows a similar move taken by alliance partner Renault, which sold its 67.7 percent stake in Avtovaz – maker of the Lada model – to NAMI in May. The French company with the diamond logo also has the opportunity to buy back its shares in the next six years.
Returning to Nissan, Nissan began making cars at the St. Petersburg in 2009. Employees working there were responsible for assembling the X-Trail, Qashqai, and Murano SUVs. The manufacturing record was set in 2018 when 56,525 vehicles were produced, with more than 350,000 units completed by early 2019.
Marking the automaker’s imminent exit, Nissan President and CEO Makoto Uchida stated: “On behalf of Nissan, I thank our Russian partners for their contributions to the business over the years. Although we were unable to continue operating in the market, we have found the best solution to support our people.”
