After Nissan & Ford, Mercedes Exits Russian Business, Likely To Cough Up $703 Million Loss

After Japanese multinational automobile firm Nissan sold its Russian business for just 1 Euro earlier this month, American automobile firm Ford Motor Co said yesterday that it would exit Russia, as it has finalized a deal to sell its 49% stake in the Russia-based Sollers Ford joint venture for a "nominal" undisclosed price.

Joining the list of automobile companies exiting Russia is German luxury carmaker Mercedes-Benz Group. After suspending activities in Russia since March, as a response to the country¡¯s invasion of Ukraine, Mercedes Benz has now said that it would withdraw from the Russian market and sell shares in its industrial and financial services subsidiaries to a local investor.

shutterstock

Mercedes-Benz is closing in on a sale of its Russian business to gthe local car dealer chain Avtodom, according to Harald Wilhelm, the German automaker¡¯s Chief Financial Officer. Mr. Wilhelm said on an earnings call on Wednesday that a final deal is being reviewed by authorities and isn¡¯t expected to affect the company¡¯s earnings, as per Wall Street Journal report.

Ford said Wednesday that it has sold its 49% stake in its joint venture with Soller PJSC, which it established in 2011 to produce and distribute Ford vehicles in Russia. The company said it still has the option to repurchase the shares within the next five years.

Ford reportedly didn¡¯t disclose the price tag on the sale of its stake in the joint venture on Wednesday, saying only that its shares were transferred ¡°for a nominal value¡±.

Mercedes-Benz has taken a hit of €709 million, equivalent to about $703 million, related to its Russian business, according to a spokesperson, as per Wall Street Journal report.

Also Read: Russians Grab Last Goods From H&M & IKEA

Automakers¡¯ Exodus From Russia

About a week after Russia invaded Ukraine, Ford had said on March 1st that it would cut its joint-venture operations in Russia, while Mercedes-Benz too had said around the same time that it would suspend exports and cease manufacturing there until further notice.

shutterstock

They were joined by other auto makers around the world in the exodus, including Japan¡¯s Toyota Motor Corp. and French automaker Renault.

The report mentioned that Stellantis NV, owner of Chrysler and Jeep had said in April that it would suspend production in the country.

Earlier this month, Nissan Motor Co¡¯s handover of its business in Russia to a state-owned entity for just 1 Euro earlier implied that the company has to cough up a mammoth $687 million loss.

Also Read: How China Is Filling The Void In Russian Market

For the latest and more interesting financial news, keep reading Indiatimes Worth. Click here.