Reuters: Hyundai Motor unlikely to repurchase Russia plant for now

Hyundai Motor’s St. Petersburg plant in Russia. (Hyundai Motor)

Hyundai Motor is unlikely to repurchase its former manufacturing plant in Russia, signaling a possible permanent exit from the market, Reuters reported on Monday, citing sources familiar with the matter.

According to Reuters, a source close to internal discussions said Hyundai Motor is not in a position to buy back the plant at this time, referring to the automaker’s former production facility in St. Petersburg, which it sold to a Russian company following the outbreak of the war in Ukraine.

Hyundai Motor entered the Russian market in 2010 with the completion of the St. Petersburg plant and, together with Kia, had been one of the largest foreign automakers in the country prior to the war.

However, Western sanctions imposed after Russia’s invasion of Ukraine in 2022 disrupted parts supplies, forcing Hyundai Motor to suspend operations at the plant in March of that year. In December 2023, the company sold the facility and its 100 percent stake in its Russian business to local firm Art-Finance LLC for just 10,000 rubles.

At the time of the sale, Hyundai Motor included a buyback option allowing it to repurchase the plant within two years. Given that the transaction was finalized in January 2024, the option is expected to expire in January 2026, prompting speculation over whether the company would reclaim the asset.

The Reuters source did not specify why a buyback would be difficult but said the ongoing war remains the key obstacle, adding that the war must end first.

While ceasefire talks led by the administration of U.S. President Donald Trump are under way, no final agreement has been reached and Western sanctions on Russia remain in place.

Hyundai Motor told Reuters that no final decision has yet been made regarding the buyback option.