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Mercedes has become the most recent Western corporation to leave Russia in the wake of the February invasion of Ukraine.
Early in March, the German company halted producing in and importing from the nation.
However, it has now announced that it will leave the Russian market and sell stock in its subsidiaries to a regional investor.
Ford announced Wednesday that it has also agreed to leave the Russian market.
In March, the company declared that its activities in Russia would cease. Although it has the option to repurchase the shares within five years. It has now sold its 49% ownership in the Sollers-Ford joint venture.
Nissan, a Japanese company, left Russia earlier this month after Toyota and Renault did the same.
Nissan handed over its business to a state-owned organization for a small amount, reportedly less than £1, at a loss of $700 million (£600 million).
According to Chief Financial Officer Harald Wilhelm, Mercedes’ exit from Russia will not impact the company’s profits significantly.
The decision was made after the early-year withdrawal of major Western corporations from Russia, including Starbucks, McDonald’s, and Coca-Cola.
Western companies pulled operations from Russia
In the early stages of the war, automakers such as Jaguar Land Rover, General Motors, Aston Martin, and Rolls-Royce halted deliveries.
Mercedes was in line with other businesses when it stopped exports and suspended operations in Russia early this year, according to James Baggott, editor-in-chief of the industry website Car Dealer Magazine. However, a large number of other automakers then abruptly left the nation.
According to Natalia Koroleva, chief executive of Mercedes-Benz in Russia, the transfer’s primary goals were to fulfill commitments to Russian clients and maintain jobs in Russia.
9,558 Mercedes vehicles were sold in Russia from January to September, a decrease of 72.8% from last year.
Mercedes-Benz raises profit projection as demand for luxury vehicles soars
As a result of strong demand for luxury vehicles and cost savings, Mercedes-Benz increased its full-year profit prediction on Wednesday. Offsetting the supply chain bottlenecks that have limited industry output this year.
The German manufacturer announced that after profits at its vehicles division nearly tripled in the third quarter from pre-pandemic levels. It now projected group earnings to rise by at least 15% this year, up from a previous prediction of 5%-15% growth.
According to chief financial officer Harald Wilhelm, the company is well-positioned for the coming year, thanks to the demand in Europe and a sizable order backlog. The company will also prioritize the fourth quarter’s inventory reduction. As a result, the business anticipated higher fourth-quarter sales than it had a year earlier.
The sharp rise in profitability follows a 2020 commitment by Mercedes-Benz, a member of the Daimler Group. To reduce fixed expenses, capital expenditures, and R&D spending by more than 20% by 2025.
According to chief financial officer Harald Wilhelm, it may need more savings than anticipated to hit that goal.
Wilhelm responded that conversations were taking place on a case-by-case basis. But that this was “not a request to submit us their invoices” when asked how the automaker would help suppliers grappling with increased expenses.
In response to mounting consumer financial stress, he continued, the corporation has no plans to reduce list pricing or increase discounting. It will however, adhere to its strategy of promoting the luxury status of its vehicles over volume sales.
Compared to 1.4 billion euros and 23.5 billion in the same quarter of 2019. The automobile segment made 4.03 billion euros from 28.2 billion in revenue.
The business increased its 12-to-15% full-year margin projection for the automotive division.