Nissan Leaves Russian Market As Another Casualty Of The War In Ukraine

Industry News / 6 Comments

It joins the growing list of departing manufacturers.

In a press release yesterday, Nissan announced that it will be ceasing all of its operations in Russia and exiting the market. The deal, which will be finalized in the coming weeks, will see Nissan sell its operations for 1 Euro (97 cents). This comes after the economy was plunged into turmoil and uncertainty in February due to Russia sending tens of thousands of troops across the border into Ukraine.

Many brands over the past nine months have decided to leave the country. Nissan previously announced the suspension of its operations there in March, and its recent move mirrors what other Japanese manufacturers have done. Just last month, Toyota announced its plans to leave, with Mazda reportedly not far behind. It also puts it on the same track as Renault, Nissan's largest shareholder, which exited the market back in May as Russia revived a Soviet Dinosaur to produce cars locally.


The manufacturer will transfer Nissan Manufacturing Russia LLC (NMGR) to NAMI, the Central Research and Development Automobile and Engine Institute owned by the Russian government. The plant in St. Petersburg manufactured the Qashqai (Rogue Sport in America), X-trail (Rogue), and Murano SUV. It's yet to be seen what will become of the plant, with only vague plans for "future passenger vehicle projects," but from what we've seen, the future doesn't look great.

Due to the exit, Nissan will lose a one-time amount of 100 billion yen ($687 million). It will then see that the St. Petersburg plant and the Sales & Marketing Center in Moscow will continue operating under a new name. All of the employees in the market will receive employment protection for 12 months, and the company will have the option to buy back operations within the next six years (similar to Renault's deal). This likely hinges on whether Russia ceases its invasion and makes significant enough reparations to warrant the reinvestment.


According to Nissan, due to "assumed zero activity in the market in this fiscal year," it remains on track to hit its profit goals for 2022, unlike Toyota and Lexus, which suffered major losses this year due to reduced sales volumes before their withdrawal. The same can't be said for its shareholder Renault though, which announced today in a separate statement that Nissan's exit from the market "will have a negative contribution to Renault Group's net income estimated at €331 million ($322 million U.S.) for the 2nd half 2022."

Finally, Nissan President and CEO Makoto Uchida left us with a few words about the matter, "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."


While Nissan's withdrawal from Russia is an important move, the value of the sale and the buy-back option suggest that, for now, the move is more of a front than a genuine withdrawal and leaves the door open to a low-cost re-entry into the market if conditions improve. However, the long-term effects remain to be seen.

Elsewhere, Nissan and Renault have initiated talks to see their alliance deepen, with discussions currently underway for the former to invest in the new Renault EV entity as a means of advancing the Nissan Ambition 2030 strategy of launching 23 electrified vehicles by 2030. This is part of a broader $26 billion investment from the Renault-Nissan-Mitsubishi alliance to go electric.


Join The Discussion



Related Cars

To Top