© Reuters. FILE PHOTO: The Mercedes-Benz logo is seen at the 43rd Bangkok International Motor Show, in Bangkok, Thailand, March 22, 2022. REUTERS/Athit Perawongmetha
BERLIN/MOSCOW (Reuters) – Mercedes-Benz said on Wednesday it would withdraw from the Russian market and sell shares in its industrial and financial services subsidiaries to a local investor, becoming the latest carmaker to exit the country.
Japan’s Nissan (OTC:) this month took a $687 million loss in handing over its business in Russia to a state-owned entity for one euro, mirroring an earlier move by Renault (EPA:) which sold its majority stake in Russia’s Avtovaz for one rouble.
Mercedes-Benz Russia said shares in the local subsidiaries would be sold to car dealer chain Avtodom.
Mercedes Chief Financial Officer Harald Wilhelm, while presenting third-quarter results, said the transaction was not expected to give rise to any further significant effects when it comes to the group’s profitability and financial position beyond those reported in previous quarters.
“Final completion of the transaction is subject to the authority’s approval and the implementation of contractually agreed conditions,” he added.
Both Nissan and Renault included six-year buyback clauses. Russia’s Vedomosti daily cited a source as saying that the Mercedes deal may include a similar clause.
A Mercedes spokesperson said the company’s 15% stake in Russian truckmaker Kamaz would not be affected by the intended transaction and should be transferred to Daimler (OTC:) Truck this year as planned.
Avtodom said it would select a technology partner to continue operating the production facilities at the Esipovo industrial estate northwest of Moscow, where Mercedes-Benz has a production plant.
“The main priorities in agreeing the terms of the transaction were to maximise the fulfilment of obligations to clients from Russia both in terms of after-sales services and financial services, as well as preserving jobs of employees at the Russian divisions of the company,” Natalia Koroleva, CEO of Mercedes-Benz Rus, said in a statement.
Mercedes suspended manufacturing in Russia in early March.
The Association of European Businesses (AEB) said 9,558 Mercedes vehicles were sold in Russia from January to September, down 72.8% from a year earlier.