Environment
Despite ongoing war in Ukraine, is Hyundai positioning for return to Russia?
Despite pulling out of the Russian market in a response to that nation’s invasion of Ukraine, new trademark filings and a buyback option on its shuttered factory are raising eyebrows. Is Hyundai headed for a Russian return?
Hyundai joined most Western automakers in pulling out of the Russian market, and officially “left” the market in December of 2023, issuing one of the shortest, emotionally neutral-est press releases in recent memory:
SEOUL, December 19, 2023 – Hyundai Motor Company (Hyundai) today held a Board of Directors meeting, approving a plan to sell its entire stake in Hyundai Motor Manufacturing Rus (HMMR LLC) to Art-Finance LLC. The operation of St. Petersburg-based HMMR has been suspended since March 2022. 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.
But Hyundai didn’t simply abandon its Russian assets or sell them off. The Korea Herald reports that the company “sold” its manufacturing facility in St. Petersburg for just 140,000 won (the equivalent of 100USD), with a buyback option allowing the company to buy the plant back within two years of the initial sale.
For those of you doing the math, that gives Hyundai until December 2025 to decide whether it wants to buy back its massive, multimillion dollar, 200,000-unit annual capacity St. Petersburg factory for less than the cost of taking a family of four out to a prime-time showing of whatever Disney’s latest cynical live-action cash-grab is.
“But wait,” says the disembodied head of Billy Mays’ ghost, “there’s more!” That same report cites a number of Russian outlets that claim Hyundai and Kia have received more than 20 fresh trademarks in the vehicles, parts, and accessory categories from Rospatent, the Russian Federal Service for Intellectual Property.
My guess: they’re gonna want that factory back.
Why now
While it might be nice to imagine a resolution and permanent ceasefire in Ukraine, the reality is that it’s Trump’s destabilizing tariffs, combined with a population that’s reluctant to give Chinese automakers a fresh foothold on their uphill climb, have come together to make a fresh look at the Russian market – especially as the two-year buyback deadline looms.
“With the Trump risks regarding US exports, (Hyundai) needs to figure out ways to diversify their business regions,” Kim Pil-su, an automotive engineering professor at Daelim University, told The Korea Times. “(The company) already has experience in the Russian market and Russian customers have preference for Hyundai and Kia cars. It might cost them to buy back (the Russian plant) but they are going to proceed with the buyback option to revive their Russian business.”
It’s believed that Hyundai’s new, affordable new $25,000 Inster EV will lead the Korean charge back into Russia – part of a bid to push back against the Chinese influx of affordable, high-tech EVs, while the St. Petersburg factory spools up for production of more gas-powered offerings as EVs struggle to gain traction.
At its peak, Hyundai sold 354,000 vehicles across the country, accounting for a massive 23.3% total share of the new car market. Without other Western competition, a reborn HMMR would be looking at blue skies and green fields. If cold ones.
Electrek’s Take
Nobody ever said, “this is business,” before doing something nice. Planning for a return to the world’s 11th largest economy while the rest of the industry hits the brakes and waits for more stable footing is good business.
To put it another way: scared money don’t make no money.
SOURCES: TASS, The Korea Times; image of Trump and Putin from Wikimedia. According to Google Translate, that text in the featured image reads, “GOING BACK.”
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