Hyundai does not want to sell the factory in Russia?

South Korean television station MBC reported on April 26 that Hyundai Motor Group is in the final stages of negotiations to sell its factory in Russia to a Kazakh company.

However, the car company is said to be negotiating a condition to be able to buy back this factory in the future.

“Hyundai’s decision is a bit late compared to its competitors who withdrew from the market earlier. If they had included the conditions (for acquiring the plant) in the purchase agreement, they would have been able to buy it back at a fixed price,” said Lee Hang-koo, a researcher at the Korea Automotive Technology Institute.

“Hyundai has a partner in Kazakhstan, and I believe they are selling the plant to this partner. There are two automakers there, one of which has been assembling Hyundai CKD cars for more than 10 years,” Lee speculated.

“If they sell (the plant) to a completely unrelated company, they will not be favored, and will probably suffer a loss after the deal, it will be very difficult to get favors in the future and may have to sell it at a lower price,” Mr. Lee added.

The exact sale price of the plant has not been confirmed, but industry observers believe Hyundai will incur a loss of around 1 trillion won ($745.6 million) after the sale is completed.

World - Hyundai does not want to sell the factory in Russia? — Hyundai Motor's factory in Saint Petersburg, Russia, was built in 2010 with a capacity of about 200,000 cars/year. Hyundai is said to suffer a loss of more than $700 million after selling this factory. Photo: WSJ

However, the automaker denied the reports. “It is true that discussions are ongoing regarding a possible sale, but no decision has been made,” Hyundai Motor said. South Korea’s largest automaker said it was still reviewing scenarios for the future of its business in Russia.

Hyundai's factory in St. Petersburg, Russia, was built in 2010 with a capacity of 200,000 vehicles per year. In December 2020, Hyundai acquired a nearby General Motors plant and expanded its production capacity in Russia to 300,000 vehicles per year.

Hyundai used to be a leading importer in Russia. However, purchases of core components such as semiconductors have been banned due to international sanctions, factory operations have been suspended and nearly 2,000 local employees have left the company since March 2022, after Russia launched a special military operation in Russia-Ukraine.

Hyundai, Kia and Renault (France) were the three best-selling brands in Russia before the conflict with Ukraine. Now, as global giants such as Renault, Nissan and Mercedes withdraw, Chinese companies are gradually replacing them.

Chinese automakers such as Haval, Chery and Geely now account for nearly 40% of Russia's new car sales, up from less than 10% in January-February 2022, according to data from analytics agency Autostat and consulting firm PPK .

Nguyen Tuyet (According to Korea Times, Malay Mail)

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