Mercedes-Benz to quit Russia, sell its assets
German luxury carmaker Mercedes-Benz is going to be the latest foreign auto brand to shut down its business in Russia amid the Ukraine war. On Wednesday, Mercedes said it would quit Russia and sell off its assets to a local investor. Mercedes is going to be the fourth major carmaker after Nissan, Renault and Toyota to quit Russian auto market. The German auto giant could stand to lose its assets worth over 2 billion euros, including its sole facility in Esipovo near Moscow.
Mercedes-Benz had suspended manufacturing in Russia in March this year. Its manufacturing facility in Esipovo near Moscow is used to manufacture E-class sedans and SUVs and has around 1,000 employees. According to reports, Mercedes-Benz has sold 9,558 units in Russia this year, between January and September. This is more than a 70 per cent drop in sales compared to Mercedes- performance in Russia in the previous year.
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Mercedes-Benz Russia has confirmed that its shares in the local subsidiaries would be sold to Avtodom, a car dealer chain. The buyer plans to continue production of cars at the Mercedes facility northwest of Moscow. Natalia Koroleva, CEO of Mercedes-Benz Rus, issued a statement, saying, “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."
Mercedes also had 15 per cent stake in Kamaz, a Russian truck manufacturing company. The German carmaker said its decision to quit Russia will not impact its stake and will be transferred to Daimler Truck later this year.
Earlier this month, Japanese auto giant Nissan Motor had announced its exit from Russia. The carmaker took a hit of nearly $687 million as it transferred its business to a state-owned entity for a token amount of one euro. French auto giant Renault too had to sell off its business earlier this year for just one rouble.