Updated January 26th, 2024 at 20:39 IST
Hyundai completes Russia exit with sale of two plants to Art-Finance
Hyundai Motor announced in December its intention to sell its Russian assets for $111.69, resulting in a $214.7 million loss.
Hyundai exits Russia: Hyundai has finalised the sale of its two manufacturing plants in Russia, marking the latest exit of a global automaker from the Russian market since the onset of the Ukraine conflict. Art-Finance, the Russian buyer, confirmed the completion of the purchase of Hyundai's St. Petersburg plants on January 24, following approvals from the Russian government and the federal anti-monopoly service.
The decision to sell the assets comes as most European, Japanese, and South Korean car manufacturers suspended production and withdrew from the Russian market amid geopolitical tensions. Many of these exits involved selling assets for a nominal fee, given Russia's challenging financial environment.
Hyundai Motor announced in December its intention to sell its Russian assets for $111.69, resulting in a $214.7 million loss. Operations at the main plant were halted in March 2022.
In an official statement on Friday, Hyundai Motor confirmed the deal to sell its manufacturing facilities in Russia, although it did not specifically name Art-Finance, the entity with which negotiations were previously disclosed.
Art-Finance provided details, stating that Hyundai's assets are now part of its AGR Group. The acquired assets include two production sites in St. Petersburg: a factory in the Kamenka industrial zone and a factory in the Shushary industrial zone. The latter had been owned by General Motors before Hyundai's acquisition in 2020. Together, the two plants have an annual capacity of around 300,000 vehicles.
Andrei Pavlovich, the owner of Art-Finance, previously acquired Volkswagen's Russian assets in May 2023, renaming Volkswagen's factory to AGR Automotive. Art-Finance announced that the Hyundai plant would be renamed once all registration procedures are completed.
Despite the exit from manufacturing operations, Hyundai stated in December that it planned to continue providing post-sales services for existing vehicles in Russia, considering local conditions.
While Western competitors have exited the Russian market, Chinese carmakers have been filling the void. However, Chinese car sales, comprising over 56 per cent of the market, seem to have peaked as Russia's domestic production has slightly recovered. The dynamics of the Russian automotive market continue to evolve amid geopolitical developments and industry shifts.
(With Reuters inputs.)
Published January 26th, 2024 at 20:39 IST