Hyundai Motor is not in a position to repurchase its former manufacturing plant in Russia as the deadline for a buyback option approaches, a source familiar with the matter told Reuters. The option, included when the South Korean automaker sold the facility in 2024, is set to expire in January amid the continuing war in Ukraine and ongoing Western sanctions.
Hyundai, together with affiliate Kia, was once the largest foreign carmaker in Russia but suspended operations at its St. Petersburg plant in March 2022 following Moscow’s invasion of Ukraine. The conflict triggered sweeping sanctions that disrupted supply chains and financial transactions, making continued operations untenable for most Western manufacturers.
In 2024, Hyundai sold 100% of the plant to Russia’s AGR Automotive Group for a symbolic 140,000 won, or about $97. The deal included a two-year option allowing Hyundai to buy back the facility. “It is not a situation where we can buy back the shares,” the source said, pointing to the ongoing conflict as the key obstacle, according to Reuters.
Hyundai said in a statement to Reuters that no final decision has yet been made on whether to exercise the buyback option. AGR Automotive Group did not respond to a request for comment. It remains unclear whether Hyundai could seek an extension if the January deadline passes or whether missing it would permanently forfeit the right to reclaim the plant.
The situation reflects a broader retreat by foreign automakers from Russia. With sanctions preventing normal operations and reputational risks mounting, many companies sold assets for symbolic sums while retaining buyback options in hopes of a future return. Hyundai said at the time of its exit that it would take a 287-billion-won financial hit.
Some automakers have already let such options lapse. Japan’s Mazda lost its buyback rights in October after declining to repurchase its stake in a Russian factory. Others, including Renault, Ford, Nissan and Mercedes-Benz, hold options expiring between 2027 and 2029, while Toyota and Volkswagen exited Russia without any repurchase rights.
Before its withdrawal, Hyundai’s St. Petersburg factory was among Russia’s largest foreign-owned car plants, capable of producing more than 200,000 vehicles annually. Hyundai and Kia together accounted for roughly 23% of Russia’s new car sales in 2019, selling more than 400,000 vehicles and surpassing domestic champion Avtovaz.
Russia’s auto market, once viewed as one of Europe’s most promising, is now dominated by Chinese manufacturers. In 2024, Chinese brands sold nearly 1 million vehicles in Russia out of total sales of 1.57 million units, underscoring how dramatically the landscape has shifted since Western automakers pulled out.
