New Delhi: Due to the ongoing war between Russia-Ukraine, the assets of German carmaker Mercedes-Benz, worth more than 2 billion euros or 16 thousand crore rupees, have been endangered. The company has said that the Russian government’s proposal to nationalize assets in case foreign companies leave the country is a major setback.
Mercedes-Benz is one of several global automakers that have their production plants in Russia, which have halted the import and export of vehicles with the country amid Moscow’s invasion of Ukraine.
War increases the risk of cyber attacks
Mercedes-Benz released its annual report on Friday, saying the war in Ukraine posed a range of risks ranging from disruptions to energy supplies or even cyber-attacks. “These risks may be exacerbated by the potential forfeiture of the assets of the Russian subsidiaries,” Mercedes-Benz said.
Threats to the assets of unfriendly countries in Russia
On Mercedes-Benz’s reaction, Russia’s ruling party United Russia has said that a government commission had approved the first step towards nationalizing the assets of more than 25 percent of firms owned by unfriendly countries.
Mercedes-Benz stops production in Russia
Last week Mercedes-Benz joined other foreign carmakers in halting exports to Russia. The carmaker had issued a statement saying, “Mercedes-Benz will suspend the export of passenger cars and vans to Russia as well as for local manufacturing in Russia until further notice.”
These companies also took the decision
Other carmakers such as Honda, Toyota, Volkswagen, General Motors, Jaguar Land Rover, Ford, and BMW not only suspended their operations but also exported their vehicles to the country. Mercedes-Benz has a manufacturing plant in Acipovo, near Moscow, where it produces E-Class sedans and SUVs. There are about 1,000 employees in this plant. This facility was inaugurated in April 2019.
The company manufactures many models in Russia
Mercedes sells 25 models in Russia, which includes C-Class, E-Class, S-Class, V-Class, AMG, and Maybach vehicles. It also sells electric cars like EQE and EQS. Mercedes-Benz said its Russian assets, which were valued at 2 billion euros by the end of 2021, owe about 1 billion euros to banks, for which the carmaker has issued a global guarantee.
