Hyundai Motor Group looks to restart Russian business

Hyundai Motor's factory in St. Petersburg, Russia in 2022. TASS-Yonhap

Hyundai Motor Group is moving to restart its business in Russia amid growing signs of a possible truce with Ukraine, according to industry data and officials on Sunday.

After Russia began its invasion of Ukraine in February 2022, the Korean carmaker suspended its Russian business in December 2023 after selling its St. Petersburg plant for approximately 140,000 won ($98). However, the deal also includes a buyback option that allows the company to repurchase it within two years of the initial sale.

Since U.S. President Donald Trump took office in January, peace talks have been picking up steam, leaving the possibility open for Hyundai to exercise its option before the deadline.

In response, Kia unveiled its renewed global sales strategy last week during its 2025 CEO Investor Day event. Under the strategy, the carmaker aims to widen its sales channel with a focus on not only North America, but also Europe and India. The company set its sales target for Europe, including Russia, at 770,000 vehicles by 2030, and for India at 400,000.

“It remains unconfirmed whether and when we will be able to exercise the buyback option, but we leave open the possibility,” an official from Hyundai Motor Group said.

The business resumption plan is expected to bring a positive impact to the Korean carmaker, currently under growing pressure to diversify its sales channels due to the Trump administration's 25 percent tariff on vehicles imported to the United States.

The current sentiment in the Russian market also favors Hyundai's plan.

The number of vehicle sales in Russia surged by 47 percent to 1.55 million in 2024 from a year earlier, according to a Russian news agency.

If Russia and Ukraine achieve any meaningful peace agreement this year, there is a strong possibility that the figure will rise even further.

Hyundai Motor Group’s two affiliates — Hyundai Motor and Kia — sold about 354,000 cars combined in Russia in 2021, securing the largest market share there with 23.3 percent.

Kia CEO Song Ho-sung speaks during the carmaker's 2025 CEO Investor Day in Seoul, Wednesday. Courtesy of Kia

The group, however, is rapidly losing ground to Chinese rivals after selling the factory and suspending its business in Russia. Chinese brands, which held just 8.1 percent of Russia's car market share in 2021, saw their combined figure jump to 60.4 percent last year.

Market analysts also predict that Hyundai Motor Group will resume its sales operations in Russia by the end of this year.

“Kia sold some 220,000 vehicles annually in Russia before its exit, making it the second-largest auto player there,” Samsung Securities analyst Kim Hyun-zi said. “Against this backdrop, the carmaker is widely expected to restart its business in Russia in the latter half of 2025.”

Even if it faces tough competition from Chinese firms, the Korean carmaker will be able to achieve annual sales of some 100,000 shortly after resuming sales there, according to the analyst.