Hyundai not in a position to repurchase Russian plant
South Korean automaker Hyundai is not in a position to repurchase its former manufacturing plant in Russia due to the ongoing war in Ukraine, according to a source familiar with the matter, as a buyback option is set to expire next month.
“It is not a situation where we can buy back the shares,” the source stated, News.Az reports, citing Reuters.
Hyundai confirmed that a final decision on the buyback option has not yet been made. AGR Automotive Group, which currently owns the facility, did not respond to requests for comment.
Hyundai and its affiliate Kia were once the largest foreign carmakers in Russia. The St. Petersburg plant was sold to Russia’s AGR Automotive Group in 2024 for a symbolic 140,000 won ($97), after operations had been suspended in March 2022, a month following Russia’s invasion of Ukraine. The sale included a two-year buyback clause, which is set to expire in January.
Though the person did not elaborate on the specific reasons the company could not act on the buyback option, he pointed to the ongoing conflict in Ukraine.
While U.S. President Donald Trump has made ending the war a top priority of his administration and is pressing Kyiv and Moscow to agree to a peace deal, the fighting continues and U.S. and EU sanctions against Russia remain in place.
"The war should be over," the person said.
It was not clear if missing the January deadline would lead to Hyundai definitively renouncing its right to a buyback, or if the company could potentially negotiate an extension of the option.
With their reputations at stake and Western sanctions making it impossible for foreign carmakers to keep factories operating, most pulled out of the Russian market.
When it sold its Russian assets in 2024, Hyundai said it would take a 287-billion-won hit from the deal.
Some, like Hyundai, sold their plants to Russian players for symbolic amounts and agreed options to repurchase them within fixed timeframes in the hope of one day returning.
Most of those plants are now assembling Chinese cars under Russian brands, though Hyundai's factory is producing vehicles under the Solaris brand, which was previously the name of a popular model produced by the Korean automaker for the Russian market.
Japan's Mazda Motor was the first to lose its buyback rights in October when it decided not to execute its option to repurchase 50% of its Russian factory from former partner Sollers.
Renault, Ford, Nissan and Mercedes-Benz also have buyback options which expire between 2027 and 2029. Toyota and Volkswagen sold their assets without any buyback rights.
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