The German concern Mercedes-Benz leaves the Russian market and sells its plant, which the company opened relatively recently – in 2019. Kommersant and Vedomosti were the first to report this, and later the company itself confirmed it.
The concern sells buildings, service areas and offices to the Avtodom dealer. The German company estimated its assets in Russia at €2 billion, but due to the war and sanctions pressure, the amount of the transaction may be significantly lower than the market. Experts admit that assets can be transferred to a new owner for a symbolic 1 ruble, which may be due to the difficulties of withdrawing funds from Russia for non-residents.
In its report on the results of the first half of the year, the German company noted the risks of expropriating Russian assets, and the company estimated their servicing under sanctions at €709 million. The capacity of the Russian plant in Esipovo was estimated at 25,000 cars a year, welding and painting cars were carried out on production lines. The amount of investments of the concern amounted to 19 billion rubles.
“Mercedes will not be disappointed with the way work and business is built and going in Russia,” Russian President Vladimir Putin assured during the opening of the plant in 2019.
One of the key conditions for entering the Russian market was the benefits offered by the Russian government under SPIC (special investment contracts), the project has long been considered one of the most successful in terms of public-private cooperation. Last year, Russian Mercedes was doing well, sales grew by 11% to 43,000, but after the outbreak of war, the prospects for the luxury brand began to fall rapidly – by 73%, to 9.1 thousand cars.
“As a result of the negotiation process, we managed to reach the final stage of agreeing on an investment deal. It is important that this will ensure the efficiency of the plant, maintain highly qualified jobs and competencies,” said Deputy Minister of Industry and Trade Albert Karimov.
According to him, the new owner will be able to carry out maintenance of Mercedes-Benz cars in Russia. Currently, Avtodom specializes in the sale and maintenance of premium and luxury cars in Russia. The company is owned and headed by Andrey Olhovsky. In August, Avtodom claimed that it was negotiating the launch of its own production with the support of Chinese partners, details were not disclosed, but now the company has production facilities to implement these plans.
The Russian market after the start of the war is in an extremely deplorable state and cannot get out of the crisis. Large foreign brands either left altogether or drastically reduced their presence. The fall in purchasing power made the Russian market unattractive even for Chinese brands, but the Russian Lada became the leader, which, in the face of sanctions and other restrictions, became practically uncontested in the segment of affordable cars.