The Hyundai Motor manufacturing operation in Russia faces strategic choices as executives assess the future of the HMMR plant
Hyundai Motor Company is weighing the prospects for its factory in Russia, known as Hyundai Motor Manufacturing Rus, or HMMR. A scenario discussed by a Korean publication, Dong-a Ilbo, involves the potential sale of the plant, but Seoul headquarters is not inclined to rush toward that option. The assessment indicates a need to understand the brand’s current stance inside Russia and the external pressures affecting its distributor network, which has struggled to receive wire transfers from Korea, creating financial strain for the business chain that supports HMMR’s operations. Dong-a Ilbo reports that this analysis was recently presented to Korean leadership to illuminate the challenges and opportunities facing the Russian unit.
By early 2022, monthly sales from the HMMR assembly line reached more than 17,000 vehicles, with demand spanning Russia and European markets. In March, production halted due to a shortage of component supplies. The situation mirrors another disruption in the region as Kaliningrad Avtotor ceased Hyundai car production, highlighting the broader supply chain vulnerabilities. Meanwhile, the company incurred ongoing fixed costs for employee payments, maintenance taxes for the St. Petersburg site, and utility bills for water and electricity. Dong-a Ilbo notes these cost pressures as part of the longer view on staying invested in Russia.
Despite the financial and operational hurdles, a full withdrawal from the Russian market is described as highly unprofitable. Since its inception in 2010, the HMMR plant has operated as a full-cycle facility with a design capacity of 200,000 vehicles per year. A historic line from Hyundai’s leadership underscores a reluctance to abandon Russia during difficult periods. Dong-a Ilbo highlights this stance as a guiding principle in the company’s strategic calculus.
In 2020 Hyundai acquired a permanent GM facility in St. Petersburg, but expansion plans were interrupted by the ensuing crisis. Yet Hyundai retained a significant share of the Russian car market until recently, reflecting the strength of its local presence despite shifting conditions. The current assessment suggests Hyundai Motor will continue efforts to remain in the Russian Federation for as long as practical, balancing the need to adapt with the desire to protect its footprint in the market. Dong-a Ilbo provides context for this ongoing negotiation between resilience and prudence.
Industry observers note that clarity may emerge toward the end of October. In prior years, HMMR management typically extended downtime toward the end of the month, a pattern reported by Russian Automobile. The ongoing process has included equipment preservation steps and the selective removal of completed and partially assembled vehicles, with around 1,500 cars affected by the changes. Russian Automobile offers this overview as part of the unfolding market signal.
- The Nissan plant in St. Petersburg has been transferred to new ownership and is expected to begin producing vehicles from Chinese brands.
- A cycling program called Behind the Wheel is accessible on RuTube for viewers seeking broader industry insights.