Hyundai is the latest company to sell its factory in Russia, with the carmaker ditching the plant for a nominal 10,000 rubles, the equivalent of just $111 at current rates.
Russian firm Art-Finance has purchased the assets and the sale includes a clause where Hyundai can buy back the factory within two years of the sale. The deal was approved in a board meeting earlier this week and has also received the go-ahead from Russia’s government commission on foreign asset sales.
Hyundai has said it will take a 287 billion won ($219.19 million) loss and plans to complete the deal by December 28.
Operations at the St. Petersburg plant were suspended in March 2022 following the invasion of Russia in Ukraine. The site has an annual capacity of over 200,000 units and has been responsible for building the Hyundai Solaris, Hyundai Creta, Kia Rio, and Kia Rio X-Line.
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The carmaker has been hit hard by dwindling sales across the country. Together with Kia, they were among the top three selling brands in Russia before the war. The Korea Times notes that it sold just six new vehicles in August this year, a dramatic decrease from the 2,892 units sold a year earlier. Hyundai and Kia sold a combined 400,000 vehicles in Russia in 2019, and as of 2021, the two brands had a 22.5% share of Russia’s total vehicle market.
A number of other major Western automakers have sold their local operations in Russia for nominal fees over the past 18 months. In October last year, Nissan sold its local facilities to Russia’s Central Research and Development Automobile and Engine Institute for just €1, meaning it lost 100 billion yen ($687 million). Like Hyundai’s deal, it has the option to buy back the operations within the next six years.
