Mercedes-Benz has become the latest car manufacture to announce its withdrawal from the Russian market and sell its assets to a local investor, Fox Business confirmed Wednesday.
The move comes after more than eight months of a brutal war in Ukraine that prompted several other companies, including car-makers like France’s Renault and Japan’s Nissan and Toyota, to close up shop in Russia in protest over its “special military operation.”
The world’s oldest car manufacturer will sell its industrial and financial services subsidiaries to Russian auto dealer Avtodom, first reported the Moscow Times.
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A Mercedes-Benz spokesperson told Fox Business the “decisive factor for this decision is the uncertain business environment in Russia,” but remained tight-lipped on specifics in the deal.
According to a third quarter sales report released Wednesday by Chief Financial Officer Harald Wilhelm, the war in Ukraine continues to create a challenging environment for the car maker.
“The macroeconomic and geopolitical conditions continue to be characterized by an exceptional degree of uncertainty, including the war in Ukraine, its effects on supply chains and on the availability and the development of prices for energy and raw materials,” the company said. “Further effects due to the rapidly changing situation in Russia and Ukraine are not currently known and have not yet been taken into account in our key figures.”
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The report itself did not mention Mercedes-Benz’s plans to withdrawal from the Russian market, but instead noted that there could be “substantial negative consequences for Mercedes-Benz business activities” if the “demanding environment” is exacerbated further.
Mercedes-Benz first halted its manufacturing in Russia in March after Moscow invaded Ukraine on Feb. 24.
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No financial details of the sale to Avtodom have been released, and Mercedes-Benz said the “completion of the transaction is subject to all relevant authorities’ approvals.”
General director of Mercedes-Benz-RUS Natalya Koroleva told the Moscow Times that the deal was organized with the “fulfillment of obligations to customers in Russia” along with the “preservation of jobs for employees of the Russian divisions of the company.”