AutoBeta(AutoBeta.net)10/12 Report--

On Oct. 12, Nissan announced its withdrawal from the Russian market, and all its local operations in Russia will be sold to the Russian Institute of Automotive and Automotive engine Science, a move that will cost the company 100 billion yen.

Nissan said all shares in its Russian subsidiary would be resold to the Moscow-based Central Research and Development Automotive engine Research Institute (NAMI) for future passenger car projects. In addition, Nissan's production and R & D facilities in St. Petersburg and its marketing center in Moscow will operate under the new name. However, the Russian Ministry of Industry and Trade said Nissan had the right to buy back its shares within six years, leaving a way for Nissan to return to the Russian market.

It is understood that Nissan has a factory in St. Petersburg, Russia, which broke ground on July 9, 2007 and was completed and put into production on July 7, 2009. it has an annual production capacity of 100000 vehicles, including X-Trail, Murano, Kashkai and Tellano models, and the factory employs about 2000 people. At the time, Nissan said it hoped Russia would overtake the UK to become Nissan's largest car market in Europe.

In March this year, the conflict between Russia and Ukraine broke out, Nissan had no choice but to shut down the St. Petersburg plant and had planned to resume production by late September. However, with the situation in Russia and Ukraine clearly escalating, Russian President Vladimir Putin confirmed on Monday that Russian military long-range precision weapons had carried out a "large-scale strike" against Ukraine and said that "any further attack in Ukraine will be resolutely hit back by Russia." Nissan said it had been closely monitoring the situation since then, but there was no sign of a change in the business environment, prompting the company to make the final decision to withdraw.

Nissan is the second Japanese car company after Toyota to announce its withdrawal from the Russian market. On September 23, Japanese carmaker Toyota announced on its website that Toyota and Toyota Europe had decided to permanently terminate their car manufacturing operations at their plant in St. Petersburg, Russia, due to the conflict between Russia and Ukraine. This move means that Toyota will stop production in Russia.

Toyota said the decision to stop production in Russia was not easy and that it had been looking for a suitable solution, but the St. Petersburg plant ceased operations on March 4 because it was unable to procure parts. After that, Toyota Russia Co., Ltd. continued to prepare for resumption of work, such as daily maintenance of the production line. However, even after half a year, production could not be resumed, so it had no choice but to announce the termination of production activities in Russia. Toyota said the St. Petersburg plant in Russia would start a production closure process and planned to provide maximum support to local employees, while its Moscow office would be downsized and restructured to maintain the services of Russian Toyota and Lexus owners.

In addition to Toyota and Nissan, Mazda is considering withdrawing from the Russian market. According to foreign media reports, Mazda said it was considering withdrawing from the Russian market. Mazda said it had become increasingly difficult to operate because of the disruption of the supply chain caused by the war between Russia and Ukraine. Mazda's manufacturing plant in Russia has stopped production, but Mazda has not made a final decision on sales and after-sales issues.

On May 16th, Nissan's partner Renault also announced its withdrawal from Russia. Renault said it had agreed to sell its entire stake in Renault Russia to the Moscow municipal government and its 67.69 per cent stake in AvtoVAZ to NAMI, a Russian government-backed car research and development centre. "the agreement gives Renault the option to buy back its stake in AvtoVAZ, which can be exercised at a specific time over the next six years," Renault said.

According to the data, the Russian car market sold 1667135 vehicles in 2021, of which Toyota's sales in Russia increased by 6.9% to 97941 vehicles year-on-year, second only to Lada (350741), Kia (205801), Hyundai (167331) and Renault (131,552). Nissan, another Japanese brand in the top 10, sold 51,338 vehicles in Russia in 2021.

Under the conflict between Russia and Ukraine, French, Japanese and Korean brands that had completed their layout in the Russian auto market had to exit, including Ford, GM, BMW, Volkswagen, Porsche, Mercedes-Benz and other German and American brands announced to stop production and sales in Russia. Renault, which once accounted for nearly 10% of the Russian car market, took the lead to leave, followed by Toyota and Nissan. Mazda is transferring its factory in Vladivostok to Russian carmaker Sollers. Data show that Russian car sales fell 59.6 per cent in September 2022 from a year earlier to 46698 units, and cumulative sales in the first three quarters fell 59.8 per cent to 506661 vehicles. In the future, if the situation in Russia and Ukraine cannot be alleviated, more and more enterprises will announce their withdrawal or become the norm.

Welcome to subscribe to the WeChat public account "Automotive Industry Focus" to get the first-hand insider information on the automotive industry and talk about things in the automotive circle. Welcome to break the news! WeChat ID autoWechat