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Mazda selling Russian operations for one euro

Mazda is the latest automaker to withdraw from Russia, and like Nissan it’s selling its operations for a single euro and keeping the option to repurchase.

It’s transferring all its equity interest to its joint venture partner there, Sollers, and expects to record an extraordinary loss of approximately ¥12.0 billion (A$129 million).

The transfer agreement allows Mazda to repurchase its equity interest in Mazda Sollers Manufacturing Rus (MSMR) over the next three years.

MSMR had ceased operations at the end of April after Mazda had stopped sending parts there in March.

“Although the Company has continued discussions with Sollers, it sees no path to restarting the business, hence we have agreed to transfer all of our equity interest to Sollers,” said Mazda in its second-quarter financial results.

Reuters reports word from Sollers that all approvals for the stake sale have been granted, with a spokesperson saying, “We are preparing to restart the plant next year with a new model lineup.”

Sollers owns the UAZ brand, which produces SUVs, trucks, minibuses and military vehicles.

Mazda’s Vladivostok plant had annual production capacity of 50,000 vehicles, with Mazda claiming a 1.8 per cent share of the Russian car market last year.

According to Marklines, that put it in 15th position in 2021 with 29,177 sales.

It was surpassed by UAZ, Chery, Haval, Mercedes-Benz, BMW, Nissan, GAZ, Volkswagen, Skoda, Toyota, Renault, Hyundai, Kia and market leader Lada.

Established in 2012, the MSMR joint venture produces the Mazda 6, CX-5 and CX-9.

Multiple automakers suspended Russian production in March following the Russian invasion of Ukraine.

Renault sold its 67.69 per cent stake in AvtoVAZ, Lada’s parent company, back in May to the Russian Central Research and Development Automobile and Engine Institute (NAMI) for one rouble.

The deal includes a clause allowing the Group to buy back into Russia at a number of points in the next six years.

Nissan announced in October it would also sell its Russian manufacturing, research and development, and sales operations to NAMI for a single euro. It had suspended its Russian operations in March.

Ford also confirmed last month it would sell its 49 per cent stake in its joint venture with Sollers for “a nominal value”, and retains the option to buy it back over the next five years “should the global situation change”.

Mercedes-Benz announced in its third quarter results presentation it would sell its Russian operations to local dealership chain Avtodom. This transaction may also be for a nominal amount and contain a buyback clause.

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