Before the war, Hyundai and Kia enjoyed significant popularity in the Russian market. In August 2021, the two brands combined for a 27.5% market share, surpassing Russia’s domestic brand ‘Lada’ to claim the top spot. The photo shows Hyundai’s manufacturing plant in Russia. (Hyundai)
MOSCOW, March 4 (Korea Bizwire) — Should economic sanctions against Russia be lifted, South Korea’s Hyundai and Kia are expected to be the first foreign automakers to resume operations in the country, according to Russian industry experts.
In an interview with TASS News Agency on March 4, Maxim Kadakov, editor-in-chief of Russian automotive magazine Za Rulem, stated that if the United States were to suddenly lift all sanctions, South Korea would likely be the first to permit its companies to re-enter the Russian market.
“Korean automakers will be the first to return,” Kadakov predicted. “If sanctions are lifted and positive signals emerge, Hyundai and Kia could restart sales within six months—or even sooner.” He added that Japanese and European brands would follow later.
Amid growing speculation that ongoing negotiations between Russia and the U.S. could lead to sanctions relief, local interest in the return of South Korean cars has intensified.
Hyundai Motor’s Russia-Specific Strategic Model, Solaris. (Image courtesy of Hyundai Motor Group)
Hyundai’s Buyback Option and Market Challenges
Western sanctions, imposed in response to Russia’s military actions in Ukraine in 2022, prompted a mass exodus of global corporations. Hyundai, which fully exited Russia in December 2024, sold its St. Petersburg factory and other assets to Russian firm Art-Finance for a symbolic 10,000 rubles (then approximately 140,000 KRW). However, the deal included a buyback option that Hyundai can exercise within two years, making 2025 the final window for a potential re-entry.
Before the sanctions, Kia and Hyundai dominated Russia’s foreign car market, ranking first and second in sales. However, the vacuum left by departing Western automakers has since been filled by Chinese brands, which now command a significant share of the market.
Kadakov cautioned that even if South Korean and other Western automakers return, reclaiming market share will not be easy, as Russian consumers have become accustomed to Chinese vehicles, which have improved in both quality and reliability.
Automotive analyst Igor Morzharetto echoed this sentiment, stating, “As long as sanctions remain, no one will return. However, if lifted, we can expect brands like Toyota, Hyundai, and Volkswagen to re-enter the market.”
Russian Automotive Road (Image courtesy of TASS-Yonhap News Agency)
New Players in Russia’s Automotive Market
According to Russian daily Izvestia, at least ten new brands are expected to enter the Russian market this year. KG Mobility (formerly SsangYong Motor) plans to launch its Tivoli, Korando, and Torres crossover SUVs, marking a fresh South Korean presence in Russia.
Additionally, a new Russian brand, Tenet, will begin production at Volkswagen’s former factory, while Chinese tech giant Xiaomi is set to introduce its electric vehicles to the Russian market.
As global geopolitical tensions continue to evolve, the fate of South Korean automakers in Russia will likely hinge on the outcome of ongoing diplomatic negotiations and shifting market dynamics.
Kevin Lee (kevinlee@koreabizwire.com)
