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Mercedes’ $2.2B Assets In Russia Threatened By Country’s Plan To Take Over Foreign Companies That Paused Production
Mercedes’ $2.2 Billion assets in Russia threatened by Country’s plan to take over Foreign Companies that paused production.
The German brand is one of several automakers who have withdrawn business from Russia following its invasion in Ukraine.
The Mercedes-Benz plant in Moscow was opened in April 2019 by Russian President Vladimir Putin.
Mercedes invested more than €250m in the factory, which produces 25,000 vehicles per year for the Russian market.
Mercedes-Benz has revealed in its annual report that its €2 billion ($2.18 billion) in assets could be at risk if Russia’s ruling party move forward with a proposal to nationalize manufacturing plants owned by foreign companies that paused production during the country’s invasion of Ukraine.
The German automaker is one of several car companies, including BMW, Ford, Lamborghini, Porsche and Volkswagen, who have withdrawn business from a sanctions-hit Russia following its invasion in Ukraine.
The Mercedes-Benz plant was opened in 2019 by Russian President Vladimir Putin. The plant, with 1,000 employees, produces 25,000 vehicles per year for the Russian market, including Mercedes E-Class and several SUVs.
During the opening ceremony outside Moscow, Vladimir Putin said :
“We will support such projects in the future for sure”
“Mercedes cars will be popular with Russian consumers for sure”.
Mercedes began construction of a the plant at an industrial park, some 50km north-west of Moscow in 2017, investing more than €250m in the factory.
But Russian billionaire and president of metals giant Norilsk Nickel, Vladimir Potanin, has warned the Kremlin that nationalizing western companies’ assets could send Russia back more than 100 years.
“Firstly, it would take us back a hundred years, to 1917, and the consequences of such a step — global distrust of Russia on the part of investors — we would experience for many decades”
“Secondly, the decision of many companies to suspend operations in Russia is, i would say, somewhat emotional in nature and may have been taken as a result of unprecedented pressure on them from public opinion abroad. So most likely they will come back. And personally, i would keep such an opportunity for them,”
“We should not try to ‘slam the door’ but endeavor to preserve Russia’s economic position in those markets which we spent so long cultivating.”
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