Hyundai is not currently in a position to repurchase its former manufacturing plant in Russia, according to a source familiar with the company’s internal discussions. The assessment comes as a two-year buyback option tied to the sale of the St. Petersburg facility is set to expire in January, with the war in Ukraine and continuing Western sanctions cited as the central obstacle.
The South Korean automaker, together with affiliate Kia, once dominated Russia’s foreign car market. That presence effectively ended after Moscow launched its invasion of Ukraine in February 2022, triggering sweeping U.S. and European sanctions that disrupted supply chains, payments and operations for international companies. Hyundai suspended production at its Russian plant in March 2022 and ultimately sold the facility in 2024.
Under the terms of the deal, Hyundai transferred 100% ownership of the plant to Russia’s AGR Automotive Group for a symbolic 140,000 won (about $97). The agreement included a clause allowing Hyundai to buy back the asset within two years, a provision designed to preserve the option of returning should conditions improve.
“It is not a situation where we can buy back the shares,” the source said, adding that the ongoing conflict in Ukraine remains the decisive factor. The person declined to be named due to the sensitivity of the matter.
Hyundai said in a statement that no final decision has yet been made regarding the buyback option. AGR Automotive Group did not respond to a request for comment.
Sanctions and uncertainty cloud prospects
Although the source did not outline all the constraints facing Hyundai, the continuation of the war and the persistence of U.S. and EU sanctions loom large. Despite renewed diplomatic efforts by U.S. President Donald Trump to push Kyiv and Moscow toward a settlement, fighting continues and sanctions remain firmly in place.
“The war should be over,” the source said, underscoring the company’s view that a resolution is a prerequisite for any meaningful return.
It remains unclear whether failing to exercise the option by January would permanently extinguish Hyundai’s buyback rights, or whether there might be scope to renegotiate an extension with the Russian owner. Analysts note, however, that reputational risks and legal barriers have made such renegotiations difficult for Western firms.
When Hyundai exited Russia, it booked a 287-billion-won loss related to the sale of its assets.
A broader retreat by global automakers
Hyundai’s predicament reflects a wider pattern among foreign carmakers that exited Russia after 2022. Many sold factories to local partners for nominal sums while retaining time-limited buyback options, hoping for a future re-entry. Others chose to sever ties completely.
Japan’s Mazda Motor became the first major automaker to forfeit such rights in October, opting not to repurchase its 50% stake in a Russian joint venture with Sollers. Renault, Ford Nissan and Mercedes-Benz still hold buyback options that expire between 2027 and 2029, while Toyota and Volkswagen sold their Russian assets without any repurchase clauses.
Most former foreign-owned plants are now assembling Chinese vehicles under Russian brands. Hyundai’s former St. Petersburg factory is producing cars under the Solaris name, previously used for a popular Hyundai model in the Russian market.
From market leader to exit
Before its departure, Hyundai’s St. Petersburg plant was among the largest foreign-owned auto facilities in Russia, with annual capacity exceeding 200,000 Hyundai and Kia vehicles. Together, Hyundai and Kia—of which Hyundai owns about 35%—were the country’s leading foreign carmakers prior to the war.
In 2019, the two brands sold more than 400,000 vehicles in Russia, accounting for roughly 23% of all new car sales and surpassing domestic champion Avtovaz. About half of those vehicles were produced locally.
Russia’s auto market, once viewed as one of Europe’s most promising growth stories, has struggled to recover. Chinese manufacturers now dominate, selling nearly 1 million vehicles in 2024 out of total sales of about 1.57 million units, underscoring how dramatically the landscape has shifted since Western firms pulled out.