Nissan writes off Russian business $499M financial hit
Nissan says resumption of SUV output in Russia is unlikely before March next year
Nissan took a 52.6 billion yen ($499 million) financial hit from its Russian and Ukrainian operations in its latest financial year and is not expecting to restart operations in Russia during the coming year.
Nissan stopped deliveries to Russia in March following the country's invasion of Ukraine, then ceased production at its St Petersburg plant later in the month, citing parts shortages.
Nissan has written off its Russian business in its forecast for its next fiscal year ending March 31, 2023, CEO Makoto Uchida said.
“We need to assume operations will be suspended for the year,” he told journalists on an earnings call on Thursday.
Uchida did not give a prediction for the financial impact on the company for the upcoming financial year.
Nissan said the lack of Russian sales could have a “material impact” on its 2023 financial year results and potentially beyond.
“There are many uncertainties over the impact of the geopolitical issues surrounding Russia and Ukraine, which may have a material impact on the Group’s financial position and operating results for the fiscal year ended March 31, 2023, and thereafter,” it said in a statement.
Nissan took a 52.6 billion yen financial hit from its Russian and Ukrainian operations in the year that ended March 31 included 15.2 billion yen from the impact on Nissan’s own business and 37.4 billion yen from its share of alliance partner Renault’s 2.2-billion-euro write-off.
Russia was Renault Group’s second biggest market last year thanks in part to its majority stake in AvtoVAZ, the maker of Lada-brand cars. Renault also built the Terrano SUV for Nissan at its Moscow plant.
Nissan builds the Qashqai, X-Trail and Murano SUVs at its St. Petersburg plant.
Nissan's vehicle sales in Russia fell 84 percent in April to just 605, down from 3,681 from the year before, figures from the Association of European Businesses (AEB) show.
Russia’s vehicle market fell 79 percent in April to 32,706 as automakers halted operations there, according to AEB data.
Sanctions over the war in Ukraine have badly hurt the domestic car industry as parts supplies dried up, leading to forced shutdowns.
Automakers have also reacted to consumer pressure from the West to stop doing business in Russia.
Nissan says it's too early to decide on EV spinoff, ahead of talks with Renault
Nissan says it's not ready to decide on a spinoff of its electric car activities, as alliance partner Renault is planning to do.
Nissan said it is too early to say if it will spin off its electric vehicle business, as alliance partner Renault is seeking to do, Nissan Chief Operating Officer Ashwani Gupta said.
"It's too early to consider because of our diversified market portfolio and diversified product portfolio," Gupta said Friday.
Renault said in April that all options were on the table for separating its EV business, including a possible public listing, as it seeks to catch up with rivals such as Tesla and Volkswagen.
The move has also raised speculation that Renault may consider lowering its stake in Nissan. Renault owns 43.4 percent of Nissan, which in turn has a 15 percent non-voting stake in the French company.
The structure of the partnership has long been a source of friction in Japan.
As an alliance member, Nissan would support Renault's endeavors, Gupta told reporters. At the same time, Nissan needs to focus on both electric vehicles and internal-combustion engine cars that include the hybrids, he said.
Renault Group CEO Luca de Meo plans to meet with executives from Nissan and fellow alliance member Mitsubishi in Japan next week to discuss the proposal.
Renault said Thursday that the plan to carve out separate EV and internal-combustion businesses could be in place by next year.
An entity dedicated to EVs and software would be based in France and employ about 10,000 people by 2023, according to a statement Thursday.
Renault’s potentially transformational revamp comes as the automaker struggles to compete in a declining European car market and prepares to take a mid-year financial hit of several billion euros by pulling out of Russia, its second-biggest market before the war in Ukraine.
While Chief Financial Officer Thierry Pieton said last month that Renault was considering options ranging from a simple accounting separation to an initial public offering of its EV business, Thursday’s statement indicates a relatively deep revamp is underway.
De Meo said this week that the EV business would include manufacturing and engineering at French sites, while the entity dedicated to combustion and hybrid powertrains would also have about 10,000 employees and sites around the world at lower-cost countries -- including Spain, Portugal, Turkey, Romania and Latin America. It could also involve partnerships with other entities, he said.
Renault Group has about 160,000 employees. De Meo and the automaker did not say what entity the remaining workers would be attached to.
(ANE & Bloomberg)
..si, valida per 5 o 6 anni con presupposto che la guerra e le sanzione internazionale saranno finiti. Almeno la seconda parte poco realistica.
