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South Korean carmaker Hyundai Motor announced on its website that Hyundai Motor held a board meeting and approved a proposal to sell its stake in the Russian factory (Hyundai Motor Manufacturing Russia,HMMR) in St. Petersburg, Russia. Hyundai said it was negotiating specific contract terms for the sale of shares in the plant with Art-Finance, a local Russian company. In other words, once the deal between the two sides is reached, Hyundai will officially withdraw from the Russian market.

As of press time, it was not clear what the total value of the transaction was. Foreign media reported that Hyundai's Russian factory will be sold to Art-Finance for 10, 000 Russian rubles. Like many car companies that have announced their withdrawal from the Russian market, Hyundai has proposed a buyback plan that "can be repurchased within two years" to leave room for subsequent re-entry into the local market. There are also media reports that Hyundai executives said that Hyundai Motor sold its HMMR shares for only 7000 rubles. Hyundai officials have not responded to media reports and are currently unable to confirm the authenticity of the news.

Affected by the sudden conflict between Russia and Ukraine at the end of February last year, Hyundai's factory in St. Petersburg, Russia has suspended production since March. Before the conflict between Russia and Ukraine broke out, the Russian market was one of the most important markets for Hyundai. As a reference, the Russian car market sold 1667135 vehicles in 2021, of which Hyundai sold 167331, accounting for 10 per cent of the Russian car market and about 6 per cent of Hyundai's global sales. But hit by these events, Hyundai's sales in Russia plummeted, falling 66.5 per cent to 119708 vehicles in 2022 compared with the same period last year.

Hyundai began production at its St. Petersburg plant in Russia in 2011, with an annual output of more than 200000 vehicles, accounting for about 4% of global production capacity, mainly producing Hyundai small cars SOLARIS, miniature SUV Crete, Kia Rio models and so on. In 2016, the chairman of Hyundai Motor Group also went to the Russian factory in person and said that "even if there are difficulties, we should not give up the Russian market", which shows to some extent the importance of Russian factories to Hyundai.

In 2020, Hyundai acquired a former GM plant near St. Petersburg and increased its investment. In 2022, Hyundai plans to mass-produce cars at the plant and export them to European and North American markets, with an annual sales target of 455000 vehicles. However, under the influence of major environmental factors such as the conflict between Russia and Ukraine, Hyundai's sales in Russia have been greatly impacted. Failed to achieve the production plan.

As one of the most important markets of Hyundai, it may not be difficult for Hyundai to withdraw from the Russian market. Previously, market analysts said that Hyundai has a large-scale investment and a certain market share in the Russian market, and it is not an easy decision for Hyundai to withdraw from the Russian market.

It is worth mentioning that before Hyundai Motor, including French, Japanese and Korean brands, all announced their withdrawal from the Russian car market. Renault, which accounts for nearly 10% of the Russian car market, was the first to announce its withdrawal from the Russian market. Toyota, Nissan, Ford and Mazda followed, while Volkswagen, Hyundai and Mercedes-Benz also planned to sell their assets in Russia. With the withdrawal of these car companies, Chinese brands quickly filled this gap in the market. The latest figures show that Chinese car brands accounted for more than 56% of Russian market sales in November.

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