Hyundai Considering Buyback of Russian Factory… Subsidiary Assessment Underway

Examining the status of global operations, including in Russia HMMR buyback deadline is December this year Sale price was 140,000 won… Estimated repurchase cost around 1 trillion won Hyundai’s affiliates that did not withdraw may benefit from repurchase

Reported by Bae Chang-hak, Korean Economic TV — Sept. 10, 2025, updated at 20:57

Anchor: Hyundai Motor Group, facing difficulties in the U.S. due to tariffs, is carefully reviewing its global operations to explore solutions. According to our exclusive reporting, the company sold its Russian plant in 2023 for 140,000 won but is now considering purchasing it back and has initiated an assessment of each subsidiary’s situation.

Report: It’s not yet certain whether Hyundai will exercise the right to repurchase, but they are following an internal process and taking steps. Last week, Hyundai sent a formal request to its subsidiaries globally, asking them to evaluate the status of their international operations and submit suggestions. Russia – a country where Hyundai once fully withdrew but re-registered its trademarks last year and is now considering returning to the market – is included in that request.

Hyundai has stated that this is “in preparation for next year’s business plans, and that overseas subsidiaries, including those in Russia, have been asked to do the same.” It described the move as part of its routine annual operations.

Historically, Hyundai established a plant in St. Petersburg, Russia, in 2007, with a production capacity of 200,000 vehicles per year. Sales were strong enough to justify extended overtime work, and over 1 trillion won was invested in HMMR (Hyundai Motor Manufacturing Rus).

However, with the onset of the Russia–Ukraine war, operations and car deliveries were repeatedly halted, accruing losses in the trillions of won. Ultimately, toward the end of 2023, Hyundai sold HMMR to the local venture capital firm ArtFinance for 10,000 rubles – about 140,000 won at that time. The deal included a buyback clause, with a deadline in December of this year.

Anchor: If Hyundai tries to repurchase the plant, how much would it cost?

Report: Under the buyback terms, Hyundai would need to buy the plant at current value, not the prior sale price. So, Hyundai is expected to weigh profitability through its due diligence before deciding whether to exercise this option. Two years ago, the book value of the plant was about 287.3 billion won. Although it was sold for just 140,000 won, normal market conditions didn’t allow for a fair sale under sanctions imposed by Western nations following the war.

Renault and Nissan similarly sold all stakes for just 1 ruble and 1 euro, respectively, before exiting Russia. For Hyundai, a simple calculation suggests that buying back the plant for 287.3 billion won would be required, implying a major cost burden.

After purchase, ArtFinance has launched a brand called “Solaris” through its subsidiary AGR, which reportedly sells rebranded cars, essentially Hyundai models with different logos and names. In just one year, Solaris’ market share locally has more than doubled—and risen to 60%—becoming a strong rival to Chinese automakers. Sales so far this year have already more than doubled compared to last year; last month, Solaris ranked 8th among top 10 vehicle sales locally. Solaris aims to produce 200 units per day this year. That momentum factors heavily into the buyback price.

Experts estimate that applying valuation multiples (e.g., to cash flows like EBITA) and considering refurbishing, line conversion, staffing, etc., could bring the cost close to 1 trillion won.

Anchor: If the buyback price is too high, could Hyundai pass on the deal?

Report: Hyundai Group is reportedly preparing two scenarios for Russia: one if the buyback succeeds, and another if it fails. This is not just a financial issue; there are legal and regulatory risks too. In May, Russia’s lower house of parliament introduced a bill that could allow it to reject buyback options by foreign firms. President Vladimir Putin also warned this year that companies fleeing cheaply won’t find it easy or cheap to return, and some believe he has demanded additional payments.

While the law to nullify buyback is not yet passed, Hyundai is reportedly reviewing all legal aspects of the situation. If the buyback succeeds, Hyundai may reuse the St. Petersburg plant as an export hub to Europe. Russia was once among the world’s top five and Europe’s top markets in annual automobile sales—Hyundai and Kia had 20–30% combined market share domestically at one point. Re-entering Russia could help offset the shock from U.S. tariffs.

If Hyundai abandons the buyback, it is likely to focus on building replacement production bases in nearby countries rather than constructing new plants in Russia.

Anchor: There’s a possibility the buyback might accelerate. If Hyundai returns to Russia, some affiliates could see improved performance.

Report: Hyundai Wia could earn substantial additional sales—around 400 billion won—if Hyundai re-enters Russia. Hyundai Wia, currently the only domestic automaker producing engines in Korea, is key to Hyundai’s manufacturing structure. Its Russian plant is operating at about 10% capacity—producing roughly 40,000 engines annually in a facility capable of 240,000 per year. Because of geopolitical risk, demand is low; it is supplying engine stock and local companies but cannot scale up.

In securities analyses, Hyundai Wia is seen as likely to benefit most among affiliates if re-entry happens—with operating profits possibly hitting 37.5 billion won under full utilization. Since losses related to the Russian plant have already been written off in its accounts, restarting operations could yield returns exceeding expectations initially.

Hyundai Wia began operating its Russian plant in October 2021, investing roughly 210 billion won. Engines once manufactured in China for shipment to Russia and Europe were partially relocated to Russia to save logistics costs. However, due to the war, proper operations lasted only about four months. A loss was recorded from the first year; in 2022 losses reached about 190 billion won.

Fortunately, in the first half of this year, Hyundai Wia turned a profit for the first time in three years—largely thanks to the appreciated value of the Russian ruble. Since that’s a one-off effect, though, full-scale plant resumption is necessary to sustain profitability. Hyundai Wia says it is monitoring the situation closely and preparing, including hiring electrical engineers locally to gear up for restarting.

Given that Hyundai Wia relies heavily on aftermarket parts sales, its profit margins have stagnated around 2%. Demand from its Mexico plant has also declined; that factory reduced output after suspension of production of a key model, “Rio,” leading to revenue loss of roughly 100 billion won. Analysts expect Hyundai Wia’s operating profit this year to be about 208 billion won, down roughly 5% from last year.

Hyundai Wia is trying to reshape itself: it sold its unprofitable machine tool division and plans to use proceeds to expand new businesses such as defense and thermal management systems. It remains to be seen whether Hyundai Wia’s turnaround hinges on the success of Hyundai’s buyback.

This has been Market Deep Dive, reporting for Korean Economic TV.