Two major automakers are the newest to sever ties with Russia amid the war in Ukraine.
German automaker Mercedes-Benz had already stopped producing and exporting to Russia in early March. Still, he is finalizing a deal to sell his Russian business to car dealership chain Avtodomnow.
The Wall Street Journal reports that the company suffered an A$1. 1 billion loss similar to its operations in Russia. This is despite Mercedes Chief Financial Officer Harald Wilhelm stating that the move would not have a significant impact on the company’s profits.
Ford is finalizing an exit agreement to withdraw from the Russian market.
On Wednesday, Ford said it had sold its 49-stake in a joint venture created in 2011 to produce and distribute its cars in Russia.
Do you want to broadcast your news? Flash lets you stream more than 25 news feeds in one place. New to Flash? Try 1 month free. Offer valid for a limited time only>
“Ford shares will be transferred to the joint venture at face value,” he said, while adding the warning of the option to buy them back in five years “if the global scenario changes. “
The American automaker also reportedly suffered a loss of A$187. 7 million after postponing Russian operations earlier.
However, the company said the final restriction will result in further deterioration.
Mercedes and Ford now join a developing contingent of automakers, adding Nissan, Ford, Toyota, Renault, Jaguar Land Rover, General Motors, Aston Martin and Rolls-Royce, to withdraw completely from Russia amid its invasion of Ukraine.
Nissan left Russia in early October and reportedly took a $1. 075 billion hit by promoting its business to a state-owned entity for less than A$2.
James Baggott, editor of Car Dealer magazine the industry, described how lucrative Russia could have been for the Mercedes in particular.
“Russia was a lucrative market for luxury carmakers like Mercedes before the war, with cars like its G-Wagon and S-Class SUV very popular with its elite,” he told the BBC.
“Maybe Mercedes was hoping for a quick solution to the war, and now that’s unlikely. The corporate in spite of everything took the long-awaited resolution to leave the country definitively.
According to the Association of European Companies, Mercedes sold 9558 cars in Russia between January and September this year. This figure was down by almost 73% from last year.
Through Mercedes-Benz General Manager in Russia Natalia Koroleva said she prioritizes assembly obligations for Russian consumers through the preservation of Russian jobs.
Many major Western companies, in addition to Starbucks, McDonald’s and Coca-Cola, have distanced themselves from Russia since the fighting began in Ukraine.
Originally published the headline “Leave the country forever”: Mercedes-Benz and Ford finalize withdrawal from Russia