Nissan announced on Tuesday that the company will sell all operations in Russia to an entity of the nation’s government.
As warfare between Ukraine and Russia escalates ahead of the winter months, the Japanese automaker announced that NAMI, a Russian government body dedicated to automotive industry development, is slated to acquire the firm’s business in the nation. Nissan, which will lose ¥100 billion, or $686 million, as the company is sold for €1, has the option to repurchase its operations within the next six years.
“On behalf of Nissan, I thank our Russian colleagues for their contribution to the business over many years,” Nissan CEO Makoto Uchida remarked in a statement. “While we cannot continue operating in the market, we have found the best possible solution to support our people.”
Nissan does not expect an impact on its full-year earnings guidance as a result of the sale since the company did not assume any activity in the market over the course of the fiscal year.
More than 1,000 companies in the West have announced that they are decreasing operations within Russia beyond the extent required by international sanctions, according to an analysis from the Yale School of Management. Nike, Goldman Sachs, Apple, IBM, and McDonald’s are among the American companies that have pulled out of the nation.
The report comes as Russia and Ukraine appear to have increased hostilities. Some 83 missiles rained down on Ukrainian cities earlier this week, including several that struck the capital city of Kyiv, where at least eight people were killed and projectiles made impact blocks from President Volodymyr Zelensky’s office building. The coordinated blitz appeared to be retaliation for a recent bombing of the Kerch Bridge, which connects mainland Russia to Crimea. The attack targeted fuel cells along the roadway and sent portions of the bridge falling into the Sea of Azov.
Russia reclaimed the Crimean peninsula eight years ago in a highly controversial move that involved nuclear threats and an escalated military presence. The destruction of the bridge provoked Russian President Vladimir Putin to accuse Ukraine of bringing harm upon the nonmilitary population. “There is no doubt,” he said. “This is an act of terrorism aimed at destroying critically important civilian infrastructure.”
Zelensky led his nation to apply for NATO membership last month once Putin revealed that he would annex the Donetsk, Luhansk, Kherson, and Zaporizhzhia regions of Ukraine after residents voted to join Russia. The referendum, which locals said was coerced by Russian soldiers, produced strikingly lopsided results.
NATO member states provided thousands of troops to neighboring eastern European countries in February after Putin ordered the invasion. The United States alone has sent more than $16.8 billion in civilian and military assistance to Ukraine since Russia’s invaded earlier this year.
Western European powers have struggled with energy shortages as Russian oil and natural gas shipments diminished. Several countries, including France and Spain, have called for residents to reduce power consumption ahead of the winter months. The Nord Stream natural gas pipeline system saw “unprecedented” damage two weeks ago, prompting some European leaders to blame Russia, which had severed flow through the pipelines one month earlier, while others pointed fingers at the United States.
