The ongoing war between Russia and Ukraine results in Nissan making the difficult decision to stop production of all vehicles in the combative country. Nissan, a Japanese motor company, announced in June that they would no longer be operating production plants in Russia. Fearing that the situation is far from over and that the conflict will continue to worsen, the car company made the decision to suspend operations. Nissan Dealers in America continue to operate as usual.
Conflict causes Problems
When Russia invaded Ukraine earlier in the year, no one knew what would happen in the long run. To be safe, Nissan suspended all production of vehicles and parts in Russia in March of 2022. As Western countries imposed a variety of economic sanctions on Russia, concerns arose as to whether the car company could continue operations at an acceptable level.
Even though Russia calls its actions in Ukraine a “special operation,” the world has watched with concern as things have continued to escalate. Companies around the world have been feeling pressure to cut ties with Russia and no longer do business within their borders.
But, few Japanese companies have followed this trend. In fact, less than 3% of Japanese companies have ceased operations in Russia since the invasion began in February. This number is the lowest among Group of Seven nations.
Plans for the Future
At the annual general meeting, a Nissan spokesman noted that the conflict between Russia and Ukraine had the very real potential to become more and more serious. Workers at the Russian plants were notified of plans to shut down the plant and that Nissan would continue to monitor the situation.
Working with Partners
Renault SA, Nissan’s alliance partner, has already withdrawn from Russia. At the annual general meeting, the Nissan spokesman announced they have been in discussion with Renault about the partnership’s future in electric vehicles. There have been talks of Renault breaking off its own electric vehicle unit.
Renault responded that they are overhauling their business plans in response to the rapid rise in EV technology and competition from hard-hitters like Tesla. They announced in April that all options would be considered.
Meanwhile, Nissan said they currently have no plans of spinning off their own EV division. Nissan has been in the electric vehicle game since it released the Leaf in 2010. This EV is one of the best-selling vehicles at your local Nissan dealer. The Japanese car company will continue to monitor the partnership and carefully consider all options from every angle before deciding what to do.
Proposed Changeup
At the annual general meeting, an investor proposed Renault, who owns 43% of stakes in Nissan, be deemed the parent company. The purpose of this declaration would be for disclosure purposes and would require the publication of the alliance between the two companies, including financial matters. The investor who pushed for this plan argued it would benefit stakeholders because they could then scrutinize and balance this alliance.
However, Nissan rejected this proposal, as was expected to happen. Nissan, on the other hand, owns a 15% non-voting stake in Renault. In May, Nissan announced, withholding a breach in confidence, they would disclose the content of the agreement between the two companies in the annual securities report.
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