Hyundai Motor considers withdrawing from Russia

According to Russian media, Hyundai Motor has decided to sell two factories in Russia and is waiting for government approval. However, the company is said to want to set a condition that it can buy back the factories at any time.

Hyundai factory in St. Petersburg, Russia. (Photo: Hyundai)

Lee Hang Koo, a researcher at the Korea Automotive Technology Institute, said Hyundai’s decision seemed to be late compared to its rivals, who had already withdrawn from the Russian market. If they had put these conditions in the deal to sell the plant, they could have bought it back at a set price.

Hyundai, once a leading importer in Russia, halted production in March 2022 after Russia invaded Ukraine. With the purchase of key components such as semiconductors hit by international sanctions, factory operations were also halted and nearly 2,000 local workers were laid off.

A Kazakh company could buy the plant. They have agreed to hire local workers and are in the final stages of negotiations. According to Lee, Kazakhstan has two car manufacturers, one of which has been assembling Hyundai CKD cars for more than 10 years. If Hyundai sells the plant to a completely unrelated company, it will be difficult to buy it back in the future.

Hyundai declined to comment on the plant sale. A company official said nothing had been confirmed.

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

It is unclear how much Hyundai will sell the factory for, but observers say the Korean automaker will lose 1 trillion won ($745.6 million) after the deal is completed.

(According to Koreatimes)

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