Hyundai finalizes Russia exit as local company buys its two car plants

Hyundai finalizes Russia exit as local company buys its two car plants

Automotive News Europe — 2024-01-26

Automotive Industry

Hyundai has signed a deal to sell its two Russian plants, making the South Korean company the latest global automaker to exit Russia since the Ukraine conflict began.

The Russian buyer, Art-Finance, said it had finalized the purchase of Hyundai's St. Petersburg plants on January 24, and received approvals from the Russian government and federal anti-monopoly service.

Most European, Japanese and South Korean automakers suspended production and left the Russian market after Moscow dispatched troops to Ukraine in February 2022, often selling for a nominal fee as Russia has made it difficult to extract funds.

Hyundai said in December it planned to sell its Russian assets for 10,000 rubles ($111.69), taking a 287b won ($214.7m) loss. Operations at its main plant were suspended in March 2022.

In a statement on Friday Hyundai confirmed it had signed a deal to sell its Russia manufacturing facilities, without naming Art-Finance, with whom it had previously said it was negotiating.

Art-Finance said Hyundai's assets had become part of its AGR Group. It said the assets "include two production sites of a company located in St Petersburg: a factory in the Kamenka industrial zone and a factory in the Shushary industrial zone".

The second factory had belonged to General Motors before Hyundai purchased it in 2020. The two plants have a combined annual capacity of around 300,000 vehicles.

Art-Finance is owned by Andrei Pavlovich, who acquired Volkswagen's Group’s Russian assets in May 2023. VW's factory was renamed to AGR Automotive. Art-Finance said the Hyundai plant would be renamed once all registration procedures were complete.

Hyundai in December said it planned to continue operating post-sales services for existing vehicles in consideration of local conditions in Russia.

Chinese automakers have been plugging the gaps left in Russia by their departing Western competitors, but Chinese car sales appear to have peaked at more than 56% of the market as Russia's domestic production has slightly recovered.