Hyundai of South Korea is not likely to buy back the car plant that it had previously bought in Russia. In 2024, the company sold the factory in St. Petersburg with a two-year buyback option, which expires in January 2026. No assurance of Hyundai that it will exercise the option is forthcoming as that deadline nears.
Hyundai’s exit from Russia came after the start of the war in Ukraine in early 2022. Production at the St. Petersburg plant had already been suspended by March that year. The company later sold the factory to AGR Automotive Group for just 140,000 won ($97).
According to a source familiar with the matter, Hyundai is not in a position to buy back the site. “It is not a situation where we can buy back the shares,” the person said. The source also pointed to the ongoing conflict and the presence of sanctions as reasons for holding back.
Hyundai said in a statement that no final decision has been made. AGR Automotive Group did not respond to questions.
War, Sanctions, and Business Risks
Russian sanctions by the West have made it hard to do business with a number of the companies. This has been limiting to trade, supply chains and banking. Hyundai, along with Kia, had been one of the top foreign players in Russia before the war began.
In 2019, Hyundai and Kia together sold over 400,000 vehicles in Russia. That was approximately 23 percent of the total number of new cars sold in the country. Fifty percent of those vehicles were produced locally in the factory which has been sold out.
When Hyundai sold the plant in 2024, it recorded a one-time loss of 287 billion won. Since then, the factory has continued to operate under Russian ownership and now makes vehicles under the Solaris brand, once used by Hyundai for the Russian market.
Other Carmakers Face Similar Deadlines
Hyundai is one of several global carmakers that added buyback clauses when selling their Russian assets. Mazda was the first to miss its chance to return after it did not act on a buyback option that expired in October. Other brands, such as Renault, Ford, and Nissan, still hold similar rights that expire between 2027 and 2029.
Toyota and Volkswagen sold their Russian assets without any option to return. Most factories once owned by foreign firms now produce vehicles under local or Chinese names.
These clauses were included during the asset sales in hopes that market conditions might improve. For now, the risks and restrictions remain.
Chinese Brands Fill the Gap
Russia’s auto market has changed since the war began. With most Western firms gone, Chinese manufacturers have expanded quickly. In 2024, nearly 1 million of the 1.57 million vehicles sold in Russia came from Chinese brands.
Hyundai and Kia once led the foreign segment, but their departure created space for new players. Chinese firms now hold a large share of the market and continue to grow.
Russia’s car sector was once seen as a growing market for Europe and Asia. Today, the environment has shifted. Many global automakers have stepped back, and the future of those with remaining buyback rights remains unclear.
As Hyundai’s deadline approaches in January, there is still no sign the company will reclaim the plant. Whether that option will be extended or allowed to expire remains unanswered.
