Following the invasion of Ukraine in February, Mercedes has become the latest Western company to withdraw from Russia. In early March, the German-based company ceased manufacturing in and exporting to the country.
However, it has announced that it will exit the Russian market and sell shares in its subsidiaries to a local investor.
In the meantime, Ford confirmed on Wednesday that it had reached an agreement to exit the Russian market as well.
In March, the company announced a complete shutdown of its operations in Russia. It has now sold its 49 per cent stake in the Sollers-Ford joint venture, but it retains the option to repurchase the shares within five years “should the global situation change.”
Nissan of Japan left Russia earlier this month, following Toyota and Renault. Nissan lost $700 million by selling its business to a state-owned entity for a nominal fee of reportedly less than £1.
Mercedes’ chief financial officer, Harald Wilhelm, stated that the company’s exit from Russia is not expected to have a significant impact on profits.
The decision follows the withdrawal of many Western companies from Russia earlier this year, including Starbucks, McDonald’s, and Coca-Cola.
In the early months of the war, other car companies, including Jaguar Land Rover, General Motors, Aston Martin, and Rolls-Royce, all halted deliveries to the country.
Mercedes, according to James Baggott, editor-in-chief of industry website Car Dealer Magazine, was in step with other companies when it halted exports and suspended operations in Russia earlier this year, but many other carmakers quickly withdrew from the country.
“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 said.
“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.”
Mercedes-Benz in Russia CEO Natalia Koroleva stated in a statement that the main priorities in the move were to fulfill obligations to Russian clients and to keep jobs in Russia. According to the Association of European Businesses (AEB), Mercedes sold 9,558 vehicles in Russia from January to September, a 72.8 per cent decrease from the previous year.
(Adapted from BBC.com)