Moscow, Russia- German automobile manufacturing company, Mercedes-Benz, has announced it will be leaving Russia.
Mercedes will now completely shut its car plant which opened in 2019 and built up to 25 000 cars per year, including the Mercedes-Benz E-Class Sedan. The factory employed 1 000 people. Mercedes was one of the country’s most popular carmakers prior to the war in Ukraine, with its G Wagen off-roader and S-Class models a favorite among Russia’s wealthy elite.
Mercedes-Benz suspended manufacturing of its automobiles in Russia in early March and according to the Association of European Businesses (AEB), just over 9 550 Mercedes-Benz vehicles were sold in Russia from January to September, down 72.8 percent from a year earlier.
According to the company, its shares in the local subsidiaries will be sold to the car-dealer chain Avtodom.
Avtodom stated it would select a technology partner to continue operating the production facilities at the Esipovo industrial park northwest of Moscow, where Mercedes-Benz has a plant, and said it will be able to carry out maintenance of Mercedes-Benz vehicles sold in Russia.
“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 the jobs of employees at the Russian divisions of the company,” said Rus Natalia Koroleva, CEO of Mercedes-Benz.
However, Mercedes-Benz’s five percent stake in Russian truck maker Kamaz will not be affected by the intended transaction and is set to be transferred to Daimler Truck this year.
Since Russia’s military operations in Ukraine in early February, many automakers have abandoned the market entirely or at least halted sales there. Nissan, for example, left the county and sold its assets to NAMI, the Central Research and Development Automobile and Engine Institute. Renault did the same, including offloading shares in AvtoVAZ to NAMI.
Similarly, Toyota paused production at its factory in Saint Petersburg in March and announced the complete closure of the plant in September. However, the automaker is maintaining its dealer network at least for servicing vehicles already on the road.
Lamborghini put its business operations in Russia on hold and donated US$1 million to the United Nations Refugee Aid. Ferrari also suspended the production of vehicles for the Russian market and pledged US$1 million to international humanitarian projects.
Meanwhile, Ford confirmed on Wednesday that it had finalized a deal to exit the Russian market as well.
