The State of Affairs in the Russian Market
Hyundai once had a strong position in Russia, but it seems those times will not return anytime soon. Earlier this year, there were reports that the company was considering the possibility of buying back its former plant in St. Petersburg. However, recent developments indicate that this plan has almost no chance of being realized, as the automaker cannot resume operations under the conditions of the ongoing war in Ukraine.
Hyundai suspended operations at its St. Petersburg plant in March 2022 and later, in 2024, sold this manufacturing enterprise for a symbolic sum of 140,000 won, which at the current exchange rate is about $97. Despite the minimal sale price, the deal included a buyback clause allowing Hyundai to reclaim the plant within two years. This window of opportunity closes in January.
The Buyback Term is Nearing its End
A source within the company told Reuters that
“the current situation is not such that we can buy back the shares”
. A Hyundai representative confirmed that the company has not yet made a final decision regarding the buyback clause. It remains unclear whether Hyundai can request an extension of this option, although if a return to the market becomes a realistic prospect, the company will likely want to keep this door open.
Lost Potential and Current Production
Prior to the invasion of Ukraine, Hyundai and its partner Kia were key players in the Russian market. At one point, they held a significant share of 23.3% of all new car sales, and in 2021 alone, they sold 354,000 vehicles in the country. When Hyundai decided to divest its Russian assets, it stated that the sale of the plant would result in a financial loss of 287 billion won ($200 million).
The former Russian Hyundai plant, now owned by AGR Automotive, currently produces models under the Solaris brand. These cars are essentially rebadged versions of old Kia and Hyundai models that were once sold locally, including the Hyundai Elantra, Hyundai Creta, and Kia K2 Cross.
Market Changes and New Leaders
Chinese automakers have become the obvious beneficiaries of the exit of major Western brands from Russia. In 2024, they sold about 1 million new cars in the country out of a total of 1.57 million.
The status of the St. Petersburg plant and the lack of active steps by Hyundai to reclaim it vividly illustrate the long-term consequences of international companies exiting the market of the aggressor country. While the plant operates under a new name and produces technically outdated models, global auto giants are losing not only production capacity but also access to a large market. This situation also demonstrates how a geopolitical crisis radically reshapes economic ties, creating new winners and losers in the automotive industry. The rapid filling of the vacuum by Chinese brands points to deeper structural shifts in global supply chains and market priorities.