Mercedes announced this week that it will withdraw from the Russian market and will sell shares it holds in local subsidiaries in the market to investors. It will, however, maintain its 15 percent stake in Kamaz.
Mercedes-Benz Russia will sell shares in those industrial and financial services subsidiaries to Avtodom, a Russian chain of car dealerships, according to Reuters. As was previously planned, however, the automaker’s shares in truckmaker Kamaz will still be transferred to Daimler Truck, which was recently carved off from the Group’s passenger car business.
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Mercedes’ decision to sell off its other holdings in the country comes after it suspended production in early March, following Russia’s invasion of Ukraine. The terms of this sale are unclear at this point, but Harald Wilhelm, the automaker’s chief financial officer, said that the transaction would not give rise to any significant effects relating to the company’s profitability or financial position, beyond those reported in previous quarters.
The company is far from the first to exit the market, whose automotive sector has been hit hard by the consequences of the country’s invasion in Ukraine. Indeed, Mercedes reportedly sold just 9,558 vehicles in the country in the first nine months of 2022, down nearly 73 percent from a year earlier.
Several other automakers, including Nissan, Volkswagen, and Toyota have shut down or sold their businesses in Russia, with more expected to follow soon. Some of those, though, have built the option to buy their stakes back into the contracts they signed with the buyers of their factories and subsidiaries.
In addition, many countries applied embargoes against Russia, leading a number of automakers to put a pause on operations in the country. Now, the Russian government is attempting to restart its own soviet-era automotive sector with the assets sold to it by exiting automakers, including the revival of the Moskvich brand.
