Mercedes-Benz, the newest automaker to leave the country, announced on Wednesday that it would exit the Russian market. In fact, the German car maker plans to sell the shares in its industrial and financial services companies to a local investor.
Following Renault’s earlier decision to sell its controlling ownership in Russia’s Avtovaz for one rouble, Nissan of Japan lost $687 million this month when it sold its business in Russia to a state-owned firm for one euro.
Also, according to Mercedes-Benz Russia, shares in the local corporations would be offered to the Avtodom network of car dealerships.
However, Mercedes Chief Financial Officer Harald Wilhelm remarked that the deal was not anticipated to have any additional major effects on the group’s profitability and financial status beyond those already acknowledged in prior quarters when releasing the company’s third-quarter results.
Morever, the authority’s consent and the implementation of the criteria set forth in the contract are both prerequisites for the transaction’s eventual completion, he continued.
Nevertheless, both Nissan and Renault added six-year buyback clauses. The Russian publication Vedomosti cited an unnamed source as saying that a similar provision may be present in the Mercedes-Benz contract.
According to a Mercedes spokeswoman, the anticipated deal would not have any impact on the company’s 15% ownership position in Russian truck manufacturer Kamaz, which should pass on to Daimler Truck this year as scheduled.
Avtodom announced it would select a technology partner in order to sustain operation of the production facilities at the Esipovo industrial complex northwest of Moscow, which comprises a Mercedes-Benz production facility.
According to Natalia Koroleva, CEO of Mercedes-Benz Rus, “the main priorities in agreeing the terms of the transaction were to maximize the fulfillment of obligations to clients from Russia both in terms of after-sales services and financial services, as well as to preserve jobs of employees at the Russian divisions of the company.”
Meanwhile, Mercedes stopped the manufacturing in Russia at the beginning of March.
Mercedes-Benz sold 9,558 vehicles in Russia from January to September, according to the Association of European Businesses (AEB). This denotes a decrease of 72.8% from the same period last year.
