Nissan Pulls Out of Russia

Matt Posky
by Matt Posky
nissan pulls out of russia

Nissan is ending operations in Russia. The company has announced that it has sold its assets to the Russian government for a single Euro, which actually sounds like one hell of a deal considering Nissan estimates the decision will cost the business roughly 100 billion yen – or $687 million USD.

With 2,000 employees located within the country, the automaker expressed some amount of regret for pulling out. But the geopolitical situation is making it tricky for any business that moves a lot of product on Western markets to continue operating inside of Russia. We’ve already seen a handful of automakers vowing to abandon the region, along with hotels and fast food chains. While the majority of these businesses are sold to the state or wealthy magnates to become generic versions of their former selves, this has proven much harder to accomplish when automotive factories come into play. 

"On behalf of Nissan, I thank our Russian colleagues for their contribution to the business over many years," Nissan President and CEO Makoto Uchida said in a Tuesday statement. "While we cannot continue operating in the market, we have found the best possible solution to support our people."

Nissan leaves behind a sizable employee base, all of whom will reportedly receive some form of employment protection for 12 months, a factory in St. Petersburg, and the Sales & Marketing Center located in Moscow. However, it has retained the option to buy all that back within the next six years, similar to the deal Renault made during its own Russian pull-out. 

As for how this will affect Nissan, the automaker produced 56,000 vehicles annually at the St. Petersburg plant prior to the pandemic with the company enjoying a 6.5 percent share of the overall market in 2018. But due to novel hurdles pertaining to the Russo-Ukrainian War and supply constraints stemming from pandemic-related restrictions the automaker doesn’t foresee the pullout being any more harmful to its bottom line than sticking around. 

Renault wasn’t so lucky due to its substantial ties to AvtoVAZ – Russia’s largest automaker. The company seemed visibly hesitant to remove itself from the market until Ukrainian President Volodymyr Zelensky addressed French lawmakers, mentioning Renault by name. Following increased political pressure, the company sold all of its assets to the Russian government. 

"Renault, Auchan [and] Leroy Merlin must stop sponsoring the Russian war machine, and the murder of children and women, rapes, robberies and looting committed by the Russian army," Zelensky said in a video address to France's National Assembly. "All companies must remember that values are worth more than profit."

Hopefully, Renault feels similarly, because the company expects its net income for the 2nd half of 2022 to be €331 million ($322 million USD) lighter than originally presumed. On the surface, it sounds impossible that Renault will be taking a hit while Nissan thinks it’ll be breaking even. But the former entity holds roughly 30 percent of the Russian market (again due largely to having been a majority stakeholder in AvtoVAZ). Nissan’s share is a fraction of that and has been gradually shrinking over the last few years. 

Plenty of other automakers have vowed to suspend or limit operations in Russia after Western sanctions were introduced, though most don’t have the kind of sales volumes or localized assets for it to really matter. Though there have been exceptions – including Toyota, Suzuki, AB Volvo, Daimler Truck, BMW, and Mercedes-Benz.

Volkswagen is another major brand in the region and has already announced it would cease all exports to Russia while simultaneously suspending production at plants in Kaluga and Nizhny Novgorod. Though it didn’t seem thrilled about the prospect of losing business. The company made its announcement in March, adding that it was hoping the sweeping sanctions imposed by the European Union and the United States would be clarified. 

Renault and Nissan’s decision to abandon Russia have left less to the imagination. They’re out of the market entirely, with the possibility of buying back their old stuff being left on the table. While they’ll be impacted differently by the pullout, the duo seem to be enjoying a momentary realignment and have expressed an interest in strengthening their relationship. Earlier this week, the pair announced that they would be holding meetings to discuss the future of their ongoing alliance – making mention that the Japanese automaker was considering investing in a new electric vehicle venture helmed by its French partner. Though this is unlikely to fall outside of the purview of the existing $26-billion investment designed to ensure the Renault-Nissan-Mitsubishi alliance goes all-electric.

[Image: Memory Stockphoto/Shutterstock]

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4 of 32 comments
  • Inside Looking Out Inside Looking Out on Oct 13, 2022

    Renault is big in Russia - they own Lada. Nissan and Renault had no intention to leave Russia. They only did it because President Zelensky shamed them publicly. He basically cancelled them in Russia.

  • TDIGuy TDIGuy on Oct 14, 2022

    So it begs the question of who is left manufacturing cars in Russia and who was making their military vehicles?

    • FreedMike FreedMike on Oct 15, 2022

      Good question…. Off topic, a lot of Russia’s military hardware, including top-line T90 tanks, is ending up abandoned and then used against them by the Ukrainians. The ineptitude is just staggering…courtesy of the same folks who brought you Chernobyl.

  • Szi65724742 Not saying dude's not a douche, but Google Maps doesn't show a stop sign at any of the three Walmarts dumping onto 60 - there's a stop-line at best. And while you nerd-rage at a random dude in a truck, a similar thing happens ALL. THE. TIME here - get Prius'd and Tesla'd every single day. I got hit while stopped at a stoplight. 7:30am, sunny morning, clear, straight sightlines for a couple miles. Was a loaded down work van. I don't rage and yell to get those off the streets. Blame the drivers, not the vehicles.
  • AMcA This, from the same regulatory agency that mandates the two adjacent outboard and center rear seat buckles be incompatible, so that the impatient passenger who hits the wrong buckle the first time simply gives up. You oughta watch my husband in the back of a cab. Every time he tries to put the outboard belt into the center buckle. The belt and buckle are incompatible and won't latch. He says "godamn [insert vehicle brand]" and stays unbelted.
  • VoGhost Twenty comments, but none acknowledging that the 'Elon promised me a $35K car!' propaganda can end now. But then, accountability was never a strong suit of the anti-America crowd.
  • AMcA Old school VW HVAC controls were impossible. On Beetles and Type 2s, there were two little levers down on the floor next to the hand brake. No labels or anything, you had to know what they did. One got you more heat, one could direct it on the windshield or the floor or shut off the flow entirely. All operation was done by trial and error. Defrosting was almost impossible to get right in a hurry.
  • VoGhost The big news today is that GM joined Ford in accepting Tesla's dominance in the charging market.