Mercedes-Benz has announced that it is withdrawing from the Russian market and is ready to enter into an agreement for the sale of assets to the Russian auto dealer that holds Avtodom. After the approval of the regulatory authorities, the German brand factory in the Moscow region, its own dealerships, a bank and financial structures will pass under its control.
“The main priorities when negotiating the terms of the agreement were to maximize the fulfillment of obligations to customers from Russia, both in the field of after-sales service and in the provision of financial services,” said Natalya Koroleva, CEO of the Russia division. Quoted in the official statement from the company.
He also stressed that the priority in concluding the agreement is the protection of the jobs of Mercedes-Benz employees in Russia.
15% shares of Russian KamAZ, owned by Mercedes-Benz, will not be affected by the agreement and will be transferred to Daimler Trucks this year, clarifies Reuters.
The Ministry of Industry and Trade stated that the new owner of the Russian assets of Mercedes-Benz can attract other companies as production partners.
Avtodom told socialbites.ca that further steps in the deal will be announced after the deal is complete.
“On behalf of the Avtodom group of companies, every opportunity will be used to maintain service maintenance of Mercedes-Benz cars sold and operated on the territory of the Russian Federation,” the company emphasizes.
Construction of the Mercedes-Benz plant in the Esipovo technopark in the Moscow region began in 2017, the first cars were assembled there in the spring of 2019. The business is designed to produce 20,000 cars per year in a full cycle by welding and body painting.
The Mercedes-Benz E-Class sedan was the first to roll off the production line. The assembly of GLC, GLE and GLS off-road vehicles is also set up here. Executive-class sedans S-Class were delivered to Russia from Germany. In the spring of 2022, automobile production was discontinued.
Experts believe that in the foreseeable future, the resumption of Mercedes-Benz car production in Russia due to sanctions cannot be counted on, but Chinese companies may be interested in supplying car kits to the factory.
“I assume that this transaction was made for one ruble with the right to buy back, as Renault and Nissan have done before.
The company could not produce cars here and it is impossible to bear the losses indefinitely,
– Vesti FM radio columnist Igor Morzharetto states in an interview with socialbites.ca.
It is possible for this facility to repeat the plan previously implemented by Motorinvest.
When a Russian company buys car kits from a Chinese company, it brings it to Russia at its own expense, assembles and sells it under its own brand.
Therefore, the Chinese automaker does not risk either its funds or its reputation, he adds. According to a similar scheme, it is planned to establish automobile production under the Moskvich brand. At the same time, Morzharetto believes that the volume of the automobile market in Russia has decreased significantly, which does not speak in favor of the profitability of resuming a new full-scale production.
“The equipment at the factory was designed to assemble Mercedes cars, and if you try to assemble other cars there, you will have to re-equip welding and assembly production. If the coloring does not need to be redone, ”Morzharetto concluded.
Sergey Udalov, managing director of the Avtostat analytical agency, says that in addition to the factory, Mercedes-Benz has a lot of real estate in Russia and a stock of unsold cars.
“Mercedes-Benz has component warehouses and a training center in Veshki, not far from the Moscow Ring Road, its own flagship dealership on Leningradsky Prospekt, there is still some stock of cars that Mercedes itself cannot sell.
“Off-the-shelf cars are likely to be an interesting asset as well,” he said.
– Lists Udalov in an interview with socialbites.ca.
He believes that if a new technology partner arrives, it will be possible to reconfigure the equipment and start the production of other cars at a plant in the Moscow Region in a year at the latest.
“I don’t think Mercedes-Benz will violate sanctions to supply components to this plant or to entrust the plant to someone else,” Udalov concluded.