Hyundai Motor Co.’s factory in St. Petersburg, Russia (Yonhap)
SEOUL, March 14 (Korea Bizwire) — With an increasing number of global companies pulling back from Russia, Hyundai Motor Group is facing a dilemma in a country where it has been enjoying solid performance.
The group has Hyundai Motor Co., its independent Genesis brand, and affiliate Kia Corp., under its wing.
In 2021, Kia sold 205,801 units (12.3 percent) and Hyundai sold 171,813 units (10.3 percent) in the Russian market, ranking No. 2 and No. 3, respectively. Their combined market share reached about 23 percent in the Russian market last year.
Despite the fact that the share of the Russia market among the group’s overall global sales is not high, it’s not easy for the group to pull back from a market where it is enjoying robust performance.
On the back of the St. Petersburg plant with an annual production capacity of 230,000 units, the group established a solid presence in the Russian market with its market share ranking within the top three.
In addition, the fate of the subcontractors that entered the Russian market together with Hyundai is dependent on the company’s presence in the Russian market.
“Global companies are accepting losses arising from their decision to pull back from Russia,” said Lee Hang-koo, a researcher at the Korea Automotive Technology Institute.
“If Hyundai continues to stay in Russia, getting the reflected benefits from the exodus of rival companies, it is likely that its reputation would fall in the global market.”
It was also pointed out that Hyundai’s profitability would deteriorate even if it keeps selling in the Russian market due to the plunge in the value of the Russian ruble.
“Considering that the cars selling in the Russian market are settled in rubles, overselling is a problem. However, the suspension of production and supply is also a problem for the group,” an industry watcher said.
J. S. Shin (js_shin@koreabizwire.com)
