The German automaker has sold its Russian financial services arm to a local vehicle retailer.
Mercedes-Benz has sold its Russian financial services to car dealer Avtodom following approval from president Vladimir Putin, reports Reuters.
Following the invasion of Ukraine, a slew of car companies elected to exit the Russian market as part of a greater economic sanction. The automaker stopped production in Russia and paused exports of its luxury vehicles last year. In a blow to many G-Class enthusiasts in the region, the automaker packed up and left the market for good in October 2022.
According to Russian law, Putin has to authorize the sale of shares in finance or energy companies. Another government commission then has to approve deals concerning companies from "unfriendly" countries - nations that have placed sanctions against Russia.
Following the approval, Avtodom - a luxury vehicle specialist - will gain control of Mercedes-Benz Bank Rus. The premium dealer is hoping to take control of all of Mercedes-Benz's Russian business interests. That includes a factory near Moscow, where Avtodom hopes to restart manufacturing.
Russia's auto industry has been hit hard by the resultant sanctions, as domestic brands rely on Western funding and supply chains. This hasn't stopped them from trying, with China reportedly helping Russia to revive Moskvich, a Soviet-era carmaker.
Mercedes-Benz used to enjoy great popularity in Russia and will definitely take a hit by leaving the market. However, some things are more important than sales, and we applaud the brand for shuttering its services. It's not the only automaker that has done so, though.
Nissan and Hyundai pulled the plug in October last year, leaving the market for good and putting further strain on Russian consumers. Many brands have entered into unique deals that could allow them to enter the market again in the future.
Mazda, for example, sold its 50% stake in the Mazda-Sollers Manufacturing Russia venture for just $1. Why? Thanks to a buyback clause in the contract, the Japanese automaker will be able to repurchase its share for the same amount, should things settle down.
Renault entered a similar deal, selling 100% of its shares to Moscow City. Again, a clause stipulates that Renault can repurchase its stake during the next six years. In the meantime, the nation will build cars to maintain jobs and provide vehicles to citizens.
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