Mercedes-Benz has now joined Ford Motors Co. as the latest Western company to halt operations in Russia, eight months after Russian special military operations began in Ukraine.
“We confirm that Mercedes-Benz intends to withdraw from the Russian market and to sell its shares in its subsidiaries to a local investor,” a spokesperson of the company said on Wednesday. “Mercedes-Benz has already suspended the export of passenger cars and vans to Russia as well as the local manufacturing in Russia at the beginning of the year.”
On Wednesday, Harald Wilhelm, the German automaker’s chief financial officer, suggested the “macroeconomic and geopolitical conditions” from the conflict created a challenging business environment for the company.
It was only in 2019 that Mercedes set up its $250 million factory in Moscow producing about 25,000 cars per year and employing over a thousand workers.
Mercedes was one of Russia’s most popular carmakers prior to the war in Ukraine, with its G Wagen off-roader and S Class models favourites among Russia’s wealthy elite.
Russian Industry and Trade Ministry confirmed the Mercedes exit, announcing Avtodom as the local Russian subsidiary buying over the shares of Mercedes.
“The new owner of the Russian divisions of Mercedes-Benz, Avtodom, will be able to attract other companies as partners for joint productions,” the ministry added.
Ford Motors also said it had completed its exit from Russia, announcing it has sold its 49% share in the Sollers Ford Joint Venture. The company’s shares will be transferred to the joint venture for a nominal value, with Ford retaining the option to repurchase them within five years, “should the global situation change,” the company stated.
The sale comes after Ford suspended all operations in Russia in March, including manufacturing, supply of parts and engineering support.
Among other automakers, Japan’s Nissan left Russia earlier this month, echoing a step made by Toyota in September. Hundreds of other U.S. brands including McDonald‘s, Nike and Starbucks have announced plans to withdraw, curtail or downright close down their Russian operations this year.
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