Hyundai Buys GM Factory To Dominate Russian Car Market

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The Korean carmaker has purchased an old General Motors factory.

Back in 2015, General Motors announced that it wanted out of the Russian car market. GM built several cars at its facility in Saint Petersberg, including the Chevrolet Trailblazer, Cruze, Opel Astra, and a few rebadged models like the Chevy Niva. According to Reuters, the Hyundai Motor Group has now acquired the GM plant in Russia after first expressing interest in 2019. The sale was pending based on approval from the Russian anti-trust body, and Hyundai spokeswoman Yulia Tikhonravova has now confirmed that the acquisition was completed.

The St Petersberg Plant has the capacity to built up to 100,000 cars per year. Tikhonravova said the deal was inked back in November, but the global pandemic created uncertainty over when production would begin.

Hyundai
Hyundai
Hyundai

Hyundai and its sister company Kia already have a factory in Russia, producing up to 200,000 vehicles per year. The two Korean brands combined to sell over 400,000 vehicles in Russia in 2019, meaning the recent acquisition won't be wasted. "Yes indeed, it is our second plant, now we are working on possible scenarios to use this asset," said Alexey Kalitsev, head of Hyundai's Russia division.

The Hyundai Motor Group's other factory in Russia produces the Hyundai Solaris (a rebadged Hyundai Accent), the Hyundai Creta (similar to the Hyundai Venue), and the Kia Rio. We suspect the recently-acquired St Petersberg plant will add capacity for these three models.

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General Motors
General Motors

Hyundai is currently the best-selling automaker in Russia, though the decision to purchase a new factory comes at an odd time for the auto industry. The Association of European Businesses (AEB) expects the Russian car market to fall significantly by 13.5% to 1.522 million vehicles in a pandemic-impacted 2020. Kalitsev believes the market will only fall by around 10% and Hyundai will still be on track to sell 163,000 units in Russia (not counting Kia sales).

2018-2020 Kia Rio Front Angle View Kia
2018-2020 Kia Rio Rear View Driving Kia
Source Credits: Reuters

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