Hyundai's $1.10 exit. Korean giant offloads Russian factories amid geopolitical tensions
As per Automotive News Europe, the deal involving two Hyundai plants in Kaliningrad Oblast concluded on January 24, 2024. The prospective buyer, presumably Art.-Finance, did not need to pay a substantial sum. Earlier reports noted that the facilities were listed at a nominal price of 10,000 rubles, roughly $1.10. Meanwhile, the Korean firm lost 287 billion won or about $161.25 million.
3:26 PM EST, January 27, 2024
The swift move by the Korean company was triggered primarily by the evolving political landscape. Given Russia's assault on Ukraine, automobile firms from Europe, the USA, and Far East Asia started pulling out from the world's largest nation. Hyundai was no exception. Despite the urgency, specific legal requirements had to be satisfied before finalizing the transaction.
The combined production capacity of both plants, previously owned by Hyundai, stands at approximately 240,000 cars per annum. Automotive News Europe suggests that Art-Finance, owned by Andrey Pavlovich, who earlier acquired assets from Volkswagen during its exit from Russia, is most likely the new owner. The former Volkswagen factory is now named AGR Automotive. The factories procured from Hyundai are also due for a rebrand.
Earlier, Hyundai had expressed intentions to continue supplying Russia with essential car components and services for maintaining vehicles already on the market. However, it's crucial that new models also be made in these factories. Chances are, these will be Chinese cars. China currently holds 56 percent of the Russian automobile market.
