BERLIN/MOSCOW -- Mercedes-Benz will withdraw from the Russian market and sell shares in its industrial and financial services subsidiaries to a local investor, becoming the latest automaker to exit the country.
Mercedes-Benz Russia said shares in the local subsidiaries would be sold to car dealer chain Avtodom.
Mercedes Chief Financial Officer Harald Wilhelm, while presenting third-quarter results, said the transaction was not expected to give rise to any further significant effects when it comes to the group's profitability and financial position beyond those reported in previous quarters.
"Final completion of the transaction is subject to the authority's approval and the implementation of contractually agreed conditions," he added.
The automaker will join a long list of companies also winding down their exposure in Russia after its invasion of Ukraine in late February.
Volkswagen Group is looking for an investor to take over its factory in Kaluga, where production was halted soon after the Ukraine war began.
Toyota Motor has said it will cease vehicle manufacturing in the country.
Kerrigan Advisors recently sat down with Donnie and Denny Buckalew, co-owners of Buckalew Chevrolet, the 5th highest-volume Chevrolet dealership in Houston, Texas, to discuss their perspective on the changing auto retail industry and how challenges facing single-point dealers influenced their decision to sell their dealership.
Mazda Motor is considering a permanent exit, the Japanese company said.
Nissan said it will hand over its business in Russia to a state-owned entity for 1 euro ($0.97), taking a loss of about 100 billion yen ($687 million).
Renault decided to sell its majority stake in AvtoVAZ to a Russian science institute. The deal, however, includes a six-year option to buy back the stake.
Kia said this week that it is mulling closing its Kia plant in St. Petersburg, Russia, run by affiliate Hyundai Motor
Both Nissan and Renault included six-year buyback clauses. Russia's Vedomosti daily cited a source as saying that the Mercedes deal may include a similar clause.
A Mercedes spokesperson said the company's 15 percent stake in Russian truckmaker Kamaz would not be affected by the intended transaction and should be transferred to Daimler Truck this year as planned.
Avtodom said it would select a technology partner to continue operating the production facilities at the Esipovo industrial estate northwest of Moscow, where Mercedes has a production plant.
"The main priorities in agreeing the terms of the transaction were to maximize the fulfilment of obligations to clients from Russia both in terms of after-sales services and financial services, as well as preserving jobs of employees at the Russian divisions of the company," Natalia Koroleva, CEO of Mercedes-Benz Rus, said in a statement.
Mercedes suspended manufacturing in Russia in early March.
The Association of European Businesses (AEB) said 9,558 Mercedes vehicles were sold in Russia from January to September, down 73 percent from a year earlier.
