Restarting of Hyundai Manufacturing Rus factory, reported Interfax agency with reference to the press service of the enterprise.
“The downtime has not been extended. We are looking after staff training and equipment maintenance,” a company source told the agency.
In December 2023, Minister of Industry and Trade, Deputy Prime Minister Denis Manturov announced that Hyundai Motor will be operating in St. He announced that the parameters of the agreement on the sale of shares in the St. Petersburg factory to the Russian legal entity Art-Finance LLC will be announced soon. It was finalized.
Manturov also noted that this agreement has already been approved by the government commission tasked with monitoring foreign investments in Russia.
“The companies are clarifying the parameters of the deal, including the buyback option. We hope that decisions will be finalized in the near future. “Art-Finance, together with industrial partners, is already exploring the possibilities of an early restart of automobile production at this St. Petersburg facility,” the minister said.
The Korean side also stipulated that an article regarding the possibility of repurchasing the facility within two years be added to the agreement. In addition, Hyundai must fulfill its obligations regarding warranty and service maintenance of vehicles in the Russian Federation.
The transaction amount was symbolically 140 thousand won, which corresponds to approximately 10 thousand rubles in Russian currency.
The actual cost of this facility is approximately $220 million, according to various estimates.
Who’s involved?
The Art-Finance legal entity had previously acquired the Volkswagen Group’s Kaluga plant, which was later renamed AGR LLC (AGR). The media associates Art-Finance with the Avilon automobile group. The Hyundai plant has been in St. Petersburg since 2010. It operates in St. Petersburg. Its production capacity allows it to produce up to 200 thousand cars per year. Hyundai Creta and Solaris, Kia Rio and Rio X-Line models were produced at this facility before production was stopped in March 2022.
Russian car market experts interviewed by socialbites.ca believe that the company will restart the production of Korean cars without its official name or the assembly of Chinese cars using the large nodal cycle (SKD).
“As far as I can judge, the Koreans until recently did not want to get rid of their facilities in St. Petersburg, because this is a rather large-scale asset and very expensive for a concern outside South Korea.” Sergey Burgazliev, independent consultant on the automobile industry. — The facility has been restarted by a new owner; some Chinese auto companies may act as technological partners
or the Koreans will supply cars on a white label basis, that is, without corporate branding and logos.”
Sergei Tsyganov, author of the Telegram channel “Russian Automobile”, recalls that after production was stopped, about 70 thousand car kits for Hyundai and Kia remained at the plant. According to his information, the new owner will assemble his cars from them in the next one and a half to two years and sell them under a different brand.
“The Koreans will come back in two to three years. I don’t know the details of the deal, but since the deal was non-monetary, the Koreans sacrificed part of the asset (tool kit stock) to preserve the factory.
“They actually rent it out.”
– Tsyganov explains to socialbites.ca.
Hyundai and Kia cars in St. There is a version that it will be produced in St. Petersburg under the GAC brand, but an agreement on this issue has not yet been signed. The expert added that Art-Finance will perhaps reach an agreement with another Chinese brand or create a new brand to be registered in its own name.
Creating a new brand is less preferred because it is more costly. He argues that there will be significant marketing costs to explain to potential customers what the brand is and why it is as good as Hyundai and Kia.
“Most likely, some of the Korean experts will remain at the facility and the production processes at the factory will return to the way they were under Korean management. Production can start as early as February-March,” Tsyganov concluded.