Hyundai Motor will sell its car factory in St. Petersburg to Russian Art Finance
Source：Vedomosti
From：Taiwan Trade Center, Moscow
Update Time：2023/12/25
Korean Hyundai Motor will sell its car factory in St. Petersburg to Russian Art Finance, and the companies are currently discussing the details of the deal. This was stated in a Hyundai statement following the results of the Board of directors on December 19. It emphasizes that, despite the sale of the asset, the company will continue servicing cars previously sold to Russian customers.
The amount of the transaction for the sale of Hyundai Motor Manufacturing Rus (HMMR; the structure that owns the plant in St. Petersburg), according to the Korean newspaper Chosun Ilbo, is 140,000 won (about 10,000 rubles), which is a purely symbolic amount. The real value of the Russian plant is 287.3 billion won (about 19.1 billion rubles), the newspaper writes.
The fact that the amount of the transaction will be symbolic is also confirmed by a Vedomosti source familiar with the negotiation process of the companies. According to him, the sale of the plant was approved by the government commission on foreign investment. As part of the deal, Hyundai has an option to repurchase the asset within two years.
The new owner is likely to produce cars from the remaining stock of components at the enterprise, the interlocutor believes. According to his estimate, about 10,000 cars and about 70,000 units can now be assembled from the remnants at the Hyundai plant, provided that the missing components are delivered from China or Kazakhstan, where the Korean concern also has an assembly site. These cars will most likely be produced under their own trademark "Art Finance".
In May 2023, this legal entity has already acquired the assets of the German Volkswagen group in Russia for 125 million euros, including a plant with a capacity of 225,000 cars per year in the Kaluga region. Volkswagen Group Rus (the company owning these assets) was subsequently renamed AGR LLC, or AGR Automotive Group. This company is part of Art Finance, which at the time of the deal with Volkswagen was positioned as a structure of the Avilon car dealer holding.
Production of automobiles of foreign brands in Russia in 2021 in %
|
Brand
|
Hyundai Motor Manufacturers Rus
|
Avtotor
|
Volkswagen
Grupp Rus
|
AvtoVaz
|
Others
|
|
Share in %
|
21,8
|
16,5
|
11,2
|
10
|
40
|
Source: Avtostat
But on December 19, the Avilon press service reported that the dealer company "is not related to and is not part of the structure of Art Finance LLC." The CEO and beneficiary of this LLC remains the former CEO of Avilon, Andrey Pavlovich, it follows from the data of SPARK-Interfax. The company itself is registered in Moscow at the location of the Avilon Group car dealerships on Volgogradsky Prospekt.
The Hyundai St. Petersburg plant stopped in March 2022 due to its own and subsequent difficulties with the logistics of components. Before that, the South Korean concern was one of the most massive manufacturers of cars on the Russian market. In 2021, 234,000 cars were made in St. Petersburg, of which 71,000 were Solaris and Creta models. The rest of the volume was accounted for by Kia Rio. At the end of 2021, the machines produced at the HMMR plant began to be equipped with locally assembled engines. HMMR's net profit according to RAS (Russian Accounting Standards ) in 2021 amounted to 11.2 billion rubles, but in 2022 it received 18.8 billion rubles. the loss follows from the data of SPARK-Interfax.
Later, at the end of 2022, HMMR began stamping parts, welding and painting bodies for Hyundai Solaris for subsequent shipment to the assembly plant of the Korean concern in Kazakhstan (Vedomosti wrote about this on December 28).
The Hyundai plant will be acquired by a local investor in the near future, a Russian company was interested in the purchase, Deputy Prime Minister, Minister of Industry and Trade Denis Manturov said on September 25. He did not disclose the name of the buyer at the time. Art Finance is working on the early launch of car production at this site, Manturov said in an interview with RIA Novosti on December 19.
According to estimates by Sergey Burgazliev, an independent automotive consultant, the cost of 70,000 sets of parts for models produced by HMMR is about 74 billion rubles. The final amount depends on the completeness of the machine kits and when they were imported to Russia, the expert says. According to him, this plant is in good condition and its restart will not require a lot of money.
Source: https://www.vedomosti.ru/auto/articles/2023/12/20/1011942-na-bivshem-zavode-hyundai-mozhno-sobrat-iz-ostatkov-70-000-avtomobilei?utm_campaign=newspaper_20_12_2023&utm_medium=email&utm_source=vedomosti