Hyundai to sell its factory in this country for just $77, take $219 million hit

Buying a Hyundai factory in Russia will cost as much as a one-night stay at a three-star property in most places across the world. The Korean car manufacturer will sell its plant here for a token amount of $77 (approximately ₹6,400), taking a mammoth hit of $219 million. It has no choice because much like most global car brands, it too wants to pack up and ship out of Russia in the aftermath of the invasion of Ukraine.

Hyundai informed of its plans to sell its Russia plant in a regulatory filing that was highlighted by several European media outlets, including Automotive News Europe. While production at this facility ceased in March of 2022 post the Russian invasion of Ukraine, the company now wants to wash its hands off of the facility entirely.

Hyundai intends to transfer its assets in the factory, located in St. Petersburg, to the country's Art Finance. There may also be a buy-back deal in place. Interestingly, Volkswagen previously sold its shares in its Russian Assets to Art Finance which is a Moscow-based company providing automotive services.

The plans will likely hurt the Korean brand more than others because Hyundai - along with sister brand Kia - was among the top three car brands in Russia before the invasion. But post the invasion, many of the global automakers decided to bring operations here to a grinding halt. And while Russia may not have the biggest auto market in the world, the exit of several key western car companies have left the field wide open for some local and mostly Chinese auto brands to compete in. In fact, imported Chinese cars now account for 49 per cent of Russia's market, up from just seven per cent in June of 2021, as per data from analytics firm Autostat. But it is not just about flooding the market here with imported units. Chinese companies are also taking over facilities previously owned by other global brands who have since made an exit.