Hyundai exits Russia with sale to Art-Finance

HYUNDAI has penned a deal to sell its two Russian manufacturing plants making the South Korean car-maker that latest global producer to exit the country since its invasion of Ukraine two years hence.

 

According to a Reuters report, Russian-based Art-Finance has finalised the purchase of Hyundai’s two St. Petersburg plants after receiving approval from the Russian government and federal anti-monopoly service.

 

It is understood Hyundai Motor Company (HMC) sold its Russian assets for just 10,000 roubles ($A168.44), taking the equivalent of a $A325.8 million loss.

 

In a statement issued by HMC, it confirmed it has signed a deal to sell its Russian manufacturing facilities, without naming Art-Finance, with whom it had previously said it was negotiating.

 

“The operation of St. Petersburg-based HMMR has been suspended since March 2022,” said HMC in a statement.

 

“Hyundai is currently making final arrangements with Art-Finance for details of the deal.

 

“To support Hyundai vehicle owners in Russia, Hyundai will continue to provide after-sales services and other customer care businesses.”

 

Art-Finance said Hyundai’s assets had become part of its AGR Group, adding that the assets included “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 previously belonged to General Motors. It is understood that production at both plants has been suspended since March 2022. The two plants have a combined annual capacity of approximately 300,000 vehicles.

 

Art-Finance is owned by Andrei Pavlovich who acquired Volkswagen’s Russian assets in May last year. Volkswagen’s Russian factory was renamed AGR Automotive shortly after the purchase. Mr Pavlovich said the Hyundai plants would also be renamed once all registration procedures were complete.

 

HMC said in December (2023) that it had planned to continue operating after-sales services for existing vehicles in consideration of local conditions in Russia.

 

For now, Chinese vehicle manufacturers are making their mark in the Russian market, filling gaps left by their departing Western competitors. The sale of Chinese-sourced vehicles has peaked at more than 56 per cent of the market, with Russian-made vehicle sales recovering slightly.

 

Most European, Japanese, and South Korean vehicle manufacturers suspended production and exited the Russian car market when Russia invaded Ukraine in February 2022. All sold assets at a nominal fee after Russian made it difficult to extract funds.

 

In October of 2022, Nissan made global headlines when it sold its Russian operations to the state-owned Central Research and Development Automobile and Engine Institute for just one Euro ($A1.60).

 

At the time, the Yokohama-headquartered manufacturer said it stood to lose more than the equivalent of one billion Australian dollars on the deal.