Nissan to quit Russia, sells business for just one euro: What went wrong

Japanese auto giant Nissan has decided to quit the Russian market. What's more surprising is that the automaker has decided to hand over its business in Russia to a state-owned entity called NAMI for just one Euro, the car brand claimed on Tuesday. This means the Japanese automaker has been hit by a loss of $687 million.

The move comes months after the company was forced to halt production in the country. Also, this means Nissan became the latest major company to exit Russia since the country invaded Ukraine in February this year. Nikkei Asia claims that Mitsubishi, another major Japanese car brand under the umbrella of the Renault-Nissan-Mitsubishi alliance too, is mulling the idea of exiting the Russian market.

As part of the latest move, Nissan will hand over its operations in Russia to the state-owned company, including its manufacturing facility in St. Petersberg as well. Nissan's move comes mirroring its alliance partner Renault's decision. The French automaker sold its majority stake in Russian car manufacturer Avtovaz to a Russian investor back in May this year, which was also cited as an effect of the Russia-Ukraine war.

Nissan suspended production activity at its St. Petersberg plant in March this year due to massive supply chain disruption created by the Russia-Ukraine war. It said that since then, it had been monitoring the situation. But there was no visibility of a change to the external environment, which prompted Nissan to decide to exit the Russian market. However, despite quitting a major market and losing such a hefty sum of money in the process, Nissan is maintaining its earnings forecast for the current financial year ending in March 2023.

Meanwhile, Renault and Nissan are currently in talks about the future of their alliance, including the latter considering investing in a new electric vehicle venture by the French auto giant.

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