Photo: Mercedes
Several car manufacturers have already quit the Russian market, and more are expected to follow soon. The latest is Mercedes, which suspended local manufacturing in March, and will sell its shares to a local investor.
According to Reuters, the German company’s shares in local subsidiaries, comprising industrial and financial services, will be sold to Avtodom, a chain of car dealerships. This will not affect their 15% stake in Kamaz, however, which will still be transferred to Daimler Truck this year as they originally announced.
Avtodom will reportedly look for a technology partner in order to run the production facilities. “The main priorities in agreeing the terms of the transaction were to maximize the fulfillment 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,” Mercedes’ Russia CEO, Natalia Koroleva, said.
Details surrounding the transaction that will see Mercedes leave Russia are still unknown, but CFO Harald Wilhelm said that they do not expect this move to have any significant effects related to their profitability and financial position over the numbers reported in previous quarters. “Final completion of the transaction is subject to the authority’s approval, and the implementation of contractually agreed conditions,” Wilhelm commented.
From an official standpoint, it is unknown whether the deal will include a buyback clause. Nonetheless, Russia’s Vedomosti, cited by the news outlet, claims that the contract might feature such a clause. After all, it is definitely not unheard of, as other car manufacturers have similar clauses. Renault and Nissan, for one, have left the door open to a possible return to the Russian market by featuring six-year buyback clauses in their contracts.
In terms of sales, Mercedes reported a 72.8% hit in Russia from January to September over the previous time period, as they parted ways with 9,558 vehicles.
Avtodom will reportedly look for a technology partner in order to run the production facilities. “The main priorities in agreeing the terms of the transaction were to maximize the fulfillment 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,” Mercedes’ Russia CEO, Natalia Koroleva, said.
Details surrounding the transaction that will see Mercedes leave Russia are still unknown, but CFO Harald Wilhelm said that they do not expect this move to have any significant effects related to their profitability and financial position over the numbers reported in previous quarters. “Final completion of the transaction is subject to the authority’s approval, and the implementation of contractually agreed conditions,” Wilhelm commented.
From an official standpoint, it is unknown whether the deal will include a buyback clause. Nonetheless, Russia’s Vedomosti, cited by the news outlet, claims that the contract might feature such a clause. After all, it is definitely not unheard of, as other car manufacturers have similar clauses. Renault and Nissan, for one, have left the door open to a possible return to the Russian market by featuring six-year buyback clauses in their contracts.
In terms of sales, Mercedes reported a 72.8% hit in Russia from January to September over the previous time period, as they parted ways with 9,558 vehicles.
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