Mercedes-Benz joins host of companies leaving Russia

Russian soldiers complain about conditions on the front line

We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info

Mercedes-Benz is pulling its operations from Russia and becoming the latest company to extricate itself from the country since the Russian invasion of Ukraine. The luxury vehicle manufacturer halted production in its Russian bases back in March, shortly after the invasion got underway.

It also cut off exports to Moscow.

But, in a further step, the German-based company said on Wednesday it would sell shares in its subsidiaries in Russia to local investor Avtodom.

The company said it did not think the move was likely to have any impact on the profits generated by Mercedes-Benz.

Natalia Koroleva, CEO of Mercedes-Benz Rus, said in a statement that the decision was looking to “maximise the fulfilment of obligations to clients from Russia”, and shield Russian employees from losing their jobs.

James Baggott, editor of Car Dealer Magazine, called Mercedes’ decision a “long overdue” one.

He told the BBC: “Russia was a lucrative market for luxury car manufacturers like Mercedes prior to the war, with cars like its G Wagen off-roader and S Class very popular with its elite.”

He added: “Perhaps Mercedes was hoping for a swift resolution to the war, and now that looks unlikely, the firm has finally taken the long-overdue decision to quit the country for good.”

Ford also confirmed their departure from Russia on Wednesday, saying the company had finalised an agreement to pull out of the Russian market.

The US car manufacturer said it was selling its 49 percent stake in a joint venture for a “nominal” price.

However, Ford retains a five-year buyback clause on its shares “should the global situation change.”

It also suspended its operations in Russia in March.

Earlier this month, Japanese carmaker Nissan withdrew from Russia and reportedly handed off its business to the Russian state for less than $1.

DON’T MISS: 
Biden launches hypersonic weapon drill after Putin’s ‘massive’ drill [LIVE]
Putin’s ‘goddaughter’ narrowly escapes arrest over anti-war videos [REPORT] 
Russian prisoners trained for only 1 week thrown into Ukraine [REVEAL]

The manufacturer predicted that the move will cost the company in the region of $687 million.

They will have the option of buying back the business for six years.

In May, Renault, which owns 43 percent of Nissan, sold its business to the Russian state and gave up its stake in Avtovaz, which produces Lada vehicles.

Luca de Meo, CEO of Renault, called the decision “difficult but necessary” in order to act “responsibly” towards its employees.

He said: “Today, we have taken a difficult but necessary decision; and we are making a responsible choice towards our 45,000 employees in Russia, while preserving the group’s performance and our ability to return to the country in the future, in a different context.”

Toyota has also withdrawn from Russia since the invasion, as have many global companies such as Coca Cola, McDonald’s and Starbucks.

Source: Read Full Article