(Corrects terms of procedure in 17th paragraph)
TOKYO, June 28 (Reuters) – Nissan Motor has suspended production in Russia for the first half of its fiscal year that began on April 1, the Japanese automaker’s chief executive, Makoto Uchida, said on Tuesday.
“We believe this situation could worsen and be prolonged,” Uchida, quoted by a spokesperson, told the group’s annual general meeting, referring to the Ukrainian conflict.
Employees have been notified and Nissan will continue to monitor the situation, he added.
Nissan suspended production in Russia in March as well as exports to that country following Russia’s invasion of Ukraine. Logistical difficulties have been compounded by Western sanctions against Moscow.
Nissan’s move comes as companies around the world are under pressure to cut business ties with Russia.
Since the start of the Russian invasion on February 24, only 2.4% of Japanese companies in Russia have left the country, the lowest proportion among the Group of Seven countries, according to an analysis by Teikoku Databank based on a Yale School of Management survey.
Renault, its alliance partner, withdrew from Russia in May after growing criticism over its presence in the country.
Makoto Uchida also said at the annual meeting that Nissan was talking to Renault about the future of the electric vehicle (EV) alliance after the French automaker raised the possibility of parting ways with its EV unit.
Renault is looking to revamp its business in response to the rapid electrification of the auto industry and the growth of EV makers such as Tesla.
The French group said in April that it was considering all options, including a possible stock market listing of its EV unit.
For Nissan, a pioneer in the field of electric vehicles, it is too early to consider the split of its EV division.
“We will carefully study the matter from all angles and make our own decision,” Uchinda said.
During Tuesday’s meeting, Nissan also rejected an investor’s proposal to designate Renault, which owns 43% of its capital, as Nissan’s parent company for disclosure purposes, which the law would require. to publish a 23-year-old agreement that details the financial and commercial alliance of the two manufacturers.
The investor argued that the disclosure would allow shareholders to control and help balance the alliance.
Nissan, which holds a 15% non-voting stake in Renault, said last month it would disclose the contents of the deal in its annual securities report, as long as it does not breach an obligation confidentiality.
The Japanese group also said it would not be directly involved in the restructuring of former supplier Marelli Holdings, but would continue to work together.
The auto component maker, owned by US private equity firm KKR, has filed a court-supervised Simplified Rehabilitation Proceedings in Japan. (Satoshi Sugiyama report; French version Dagmarah Mackos, edited by Jean-Stéphane Brosse and Sophie Louet)