Hyundai Reportedly Leaving Russia for Good After Losing $200 Million

A Deal That’s Likely Done

An unnamed source told Reuters that Hyundai is not expected to exercise its two-year buyback option for its former manufacturing plant in Russia. This move would effectively close the door on a near-term return to the market. The option was included in the sale to Russia’s AGR Automotive Group in 2024, when the Korean marque recorded an accounting loss of 287 billion won (about $200 million) and transferred the plant for a symbolic price of 140,000 won ($97).

Located in St. Petersburg, the facility played a key role in Hyundai – along with its corporate sibling Kia – becoming one of the top-selling automotive groups in Russia. The plant had an annual production capacity of more than 200,000 vehicles and previously built models such as the Hyundai Solaris, a subcompact sedan based on the Accent – previously offered in the U.S. market until the 2022 model year – but adapted for local market conditions. Other models produced at the plant were the Hyundai Creta and Kia Rio.

The Insider Takeaway

The source, who is familiar with Hyundai’s internal discussions, said, “It is not a situation where we can buy back the shares.” He did not elaborate on the reasons, but cited Russia’s ongoing war with Ukraine, adding that “the war should be over.”

With the ongoing conflict and sanctions making operations in Russia challenging, several other automakers have also sold their assets. Mazda was the first to lose its buyback rights in October, while two of the world’s largest automakers, Toyota and Volkswagen, exited the market without retaining any buyback options.

Other automakers, including Ford, Mercedes-Benz, Nissan, and French automaker Renault, still hold buyback options that expire between 2027 and 2029. Hyundai’s own option, however, is set to expire in January, and based on the source’s comments, the company is unlikely to act on it.

The New Normal in Russia

With many automakers now out of the Russian market, Chinese brands have reportedly taken a dominant position, selling nearly one million vehicles in the country last year out of a total 1.57 million units sold.

Globally, Hyundai Motor Company appears to be on a strong financial footing, having reportedly surpassed Volkswagen to become the world’s second-most profitable automaker, trailing only Toyota. In the United States, the Korean automaker has committed $26 billion in investment through 2028, while the expiration of the $7,500 federal EV tax credit has weighed on parts of its electric-vehicle program.

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