Hyundai’s formal exit is in the final stages in this country: Report
South Korean auto giant Hyundai will be the next automaker to cease its business in Russia. According to a recent report by a European publication, a deal between Hyundai and a Kazakh company is currently underway that needs approval from the local government. The negotiations are in the final stages and will need the green signal from the Russian authorities to mark the brand’s smooth exit from the market.
Hyundai suspended its operations in Russia in 2022 and a formal exit hardly comes as surprising. The automaker, much like several other players, took the decision after the Russian invasion of Ukraine, which prompted several economic sanctions and trade bans on the country.
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Hyundai was said to be in the process of reviewing its options as far as the Russian business is concerned over the past year, and it seems winding up its operations seems to be the way to go. The Creta maker was one of the top three OEMs in the country alongside Renault and sister brand Kia. It has a production capacity of 200,000 vehicles annually, which is about four per cent of the brand’s global production capacity.
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It’s likely that Hyundai’s exit from Russia will be formalised in a few weeks from now. This should free up more resources and funds allocated for Russia to be utilised in other markets. It will be interesting to see which market Hyundai shifts its focus and funds after formalising its exit from Russia.
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Apart from Hyundai, other carmakers who have discontinued operations in Russia include Toyota, Renault, Suzuki, Nissan, Honda, Stellantis, Mercedes-Benz, Volkswagen and more. Renault’s 100 per cent stake was bought out by Moscow City, which renamed the automaker’s Moscow manufacturing facility to Moscow Automobile Factory Moskvich. The plant now produces rebadged vehicles sourced from Chinese manufacturer JAC under the revived Moskvitch brand.
Meanwhile, Volkswagen’s exit saw a legal tussle after local player GAZ dragged the automaker to court over allegations of breaking an existing arrangement for producing VW vehicles at the Nizhny Novgorod facility. Mercedes-Benz chose to divest its 15 per cent stake in Kamaz and sold off its shares in the local subsidiaries to Avtovaz.
The exit of global automakers from Russia has made way for Chinese players to find footing in the country. OEMs including Geely, Chery Automobile, and Great Wall Motor (GWM), grabbed 17 per cent of Russia’s auto market in 2022. It’s noteworthy that Geely is the parent company of the Swedish auto brand Volvo, which also announced its exit from Russia last year.