Hyundai Forgoes Russian Plant Buyback, Signaling Long-Term Exit Amid Ukraine War
SEOUL, Feb 2 (Reuters) – South Korea's Hyundai Motor Co has formally relinquished its chance to reclaim a key manufacturing plant in Russia, the company confirmed on Monday, closing a chapter on its once-substantial operations in a market upended by the war in Ukraine.
Hyundai, alongside its affiliate Kia Corp, ranked as Russia's top-selling foreign automaker before Moscow's invasion of Ukraine in February 2022. The company's St. Petersburg facility, which produced popular models like the Solaris and Creta, has stood idle since March of that year, crippled by sweeping Western sanctions that severed supply chains and froze financial transactions.
In a strategic retreat mirrored by peers like Renault and Toyota, Hyundai sold the plant to a local entity, Art-Finance, in 2024. The deal, concluded at a fraction of the facility's pre-war value, included a contractual repurchase option—a lifeline many saw as a hedge for a potential return. That option expired in January without action from the automaker.
"Hyundai Motor continues to provide warranty repairs and customer care services for previously sold vehicles, and remains committed to maintaining these services going forward," a company spokesperson told Reuters in a statement. The move underscores a broader, likely permanent recalibration of global supply chains away from Russia, analysts say.
The decision reflects the harsh economic realities facing multinationals in Russia: maintaining assets has become untenable under current sanctions, while a near-term resolution to the conflict appears distant. For Hyundai, the focus has shifted decisively to other growth markets, including Southeast Asia and the United States.
Reactions & Analysis
Mikhail Ivanov, Moscow-based automotive analyst: "This was an expected but symbolic step. The buyback clause was always a formality—a legal placeholder for a scenario that no longer exists. The Russian auto market is now fundamentally restructured around domestic and Eastern brands. Hyundai's exit, while painful for local jobs and consumers, is complete."
Elena Petrova, former sales manager at a Hyundai dealership in St. Petersburg: "It's a bitter end. We built a loyal customer base here over years. Now those owners worry about parts and long-term support. The company promised service, but how long can that last without a local footprint? It feels like we've been abandoned after helping build their success."
James Keller, supply chain strategist at Global Auto Insights: "Hyundai's move is a cold, rational calculation. Holding onto idle assets drains capital and creates legal exposure. Letting the option lapse clears their books and sends a clear signal to investors: Russia is off the strategic map for the foreseeable future. Other holdouts will likely follow."
Sergei Volkov, nationalist blogger and commentator: "Good riddance! They came for easy profits and fled at the first sign of trouble. Our domestic automakers will fill the gap with better, more patriotic vehicles. The West's attempt to isolate us only makes us stronger."