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; it is now finalizing a deal to sell its Russian operation to car dealer chain Avtodom.
The Wall Street Journal reports the company suffered a loss of A$1. 1 billion ($1. 2 billion) 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. an effect 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.
“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.
Ford is finalizing an exit agreement to withdraw from the Russian market. Photo/file
Nissan left Russia in early October and reportedly took a 1075 million Australian dollars ($1190 million) hit by promoting its operations to a state-owned entity for less than 2 Australian dollars.
James Baggott, editor of Car Dealer magazine of the industry, described how lucrative Russia could have been for 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 corporations, in addition to Starbucks, McDonald’s and Coca-Cola, have distanced themselves from Russia since fighting began in Ukraine.