Hyundai extends shutdown of Russian plant until end of year

Industry

Published: 06 Dec. 2023, 17:06

Hyundai extends shutdown of Russian plant until end of year

Hyundai Motor's manufacturing plant in St. Petersburg, Russia. [JOONGANG PHOTO]

Hyundai Motor has extended the suspension of its Russian plant until the end of this year, once again putting its destiny at a crossroads.

The Korean automaker renewed the downtime of the plant in St. Petersburg until Dec. 31, according to a report from Russia’s state-owned Tass news agency.

It will affect 502 workers, or half of the plant's total workers, according to the report.

Hyundai Motor denied to comment, adding that it "has been reviewing all the possible scenarios."

The plant halted production in March last year due to difficulties with the supply of components after Russia’s war with Ukraine.

The report crashed hopeful rumors about the destiny of the plant as Russian trade minister Denis Manturov in September said that a local company would buy the plant and a deal would be reached soon. The contract was reported to include a buyback option allowing Hyundai to reacquire the facility two years after the sale.

Numerous companies were reported to be the buyers including Russia's Avilon Holding and Avtotor.

Hyundai used to manufacture around 200,000 vehicles at the plant, which was once owned by General Motors, including the popular models Solaris sedans and Creta SUVs.

Hyundai Motor's manufacturing plant in St. Petersburg, Russia. [JOONGANG PHOTO]

However, sales sharply dropped since the Russia-Ukraine war as it sold only 738 vehicles in Russia in the first quarter, down 98 percent on year, according to data from the Association of European Businesses.

During the same period, Kia sold 4,435 vehicles in Russia, down 87 percent on year.

In September this year, Hyundai sold only 10 vehicles in Russia.

Some predict that Hyundai may suffer around 1 trillion won ($762 million) in losses due to the shutdown of the St. Petersburg plant.

BY SARAH CHEA [chea.sarah@joongang.co.kr]