On October 12, Nissan announced that it would withdraw from the Russian market, and all local businesses of its Russian company would be sold to the Russian Institute of Automotive and Automotive Engine Science, a move that would cost the company 100 billion yen.
Nissan said all of its shares in the Russian subsidiary will be sold for 1 euro to the Moscow-based Central Research and Development Automotive Engine 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 that Nissan has the right to buy back its shares within six years, which also leaves a way for Nissan to return to the Russian market.
It is understood that Nissan has a factory in St. Petersburg, Russia. The factory broke ground on July 9, 2007 and was completed and put into operation on July 7, 2009, with an annual production capacity of 100,000 vehicles. The main production includes X-Trail, Murano , Kashkay and Terrano models, the factory employs about 2,000 people. At that time, Nissan said that it hoped that Russia could surpass the United Kingdom and become Nissan’s largest car market in Europe by sales.
In March of this year, the Russian-Ukrainian conflict broke out, and Nissan had no choice but to shut down the St. Petersburg plant. The original plan was to resume production in late September. However, with the apparent escalation of the situation in Russia and Ukraine, Russian President Vladimir Putin confirmed on Monday that the Russian military had carried out a "large-scale strike" on Ukraine with long-range precision weapons, and said that "any further attack in Ukraine will be met with a resolute response from Russia." Nissan said it had been monitoring the situation closely since then, but there was no sign of a change in the business environment, which prompted the company's eventual decision to pull out.
Nissan is the second Japanese car company to announce its withdrawal from the Russian market after Toyota. On September 23, the Japanese automaker Toyota announced on its official website that due to the conflict between Russia and Ukraine, Toyota Motor Corporation and Toyota Motor Europe have decided to permanently terminate the auto manufacturing business of its St. Russian car production.
Toyota said the decision to end production in Russia was not made lightly, and Toyota has been looking for a suitable solution, but the St. Petersburg plant in Russia stopped operations on March 4 this year due to the inability to procure parts. After that, Toyota Russia continued to prepare for the resumption of work, such as routine maintenance of production lines. 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 that the St. Petersburg plant in Russia will start the production end process, planning to provide maximum support for local employees, and the Moscow office will be downsized and reorganized to continue to maintain services for Russian Toyota and Lexus owners.
In addition to Toyota and Nissan, Mazda is considering exiting the Russian market. According to foreign media reports, Mazda said it is considering withdrawing from the Russian market. Due to the interruption of the supply chain caused by the Russian-Ukrainian war, Mazda said that operations have become increasingly difficult. At present, Mazda’s manufacturing plant in Russia has stopped production, but Mazda has not yet made a final decision on sales and after-sales issues.
On May 16, 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 city government and its 67.69 percent stake in AvtoVAZ to NAMI, the Russian government-backed automotive research and development center. "The agreement provides Groupe Renault with an option to repurchase its shares in AvtoVAZ, exercisable at specific times over the next six years," Renault said.
According to the data, the sales volume of the Russian car market in 2021 will be 1,667,135 units, of which Toyota's sales in the Russian market will increase by 6.9% year-on-year to 97,941 units, second only to Lada (350,741 units), Kia (205,801 units), Hyundai (167,331 units), Renault (131,552 units), Nissan, another Japanese brand in the top ten, will sell 51,338 units in Russia in 2021.
Under the conflict between Russia and Ukraine, the French, Japanese and Korean brands that had already completed their layout in the Russian auto market had to withdraw from the market, including Ford, GM, BMW, Volkswagen, Porsche, Mercedes-Benz and other German and American brands announced the suspension of production in Russia. Renault, which once occupied nearly 10% of the Russian car market, left the market first, while Toyota and Nissan followed closely. Mazda is transferring its Vladivostok car factory to Russian car manufacturer Sollers. Data show that in September 2022, Russian car sales fell by 59.6% year-on-year to 46,698 units, and the cumulative sales in the first three quarters fell by 59.8% year-on-year to 506,661 units. In the future, if the situation in Russia and Ukraine cannot be eased, more and more companies will announce their withdrawal or become the norm.
