Voluntary liquidation instead of selling a Russian corporation
Mazda cleans up… Sale of shares in Renault in France
“Strong confrontation with Russia, support with the Japanese government”
Hyundai Motor Company 210th Day of Suspension of Plant in Russia
Last month’s sales were ‘0’… Wia also ‘Stop’
Due to the small market share, the impact on earnings is ‘negligible’
As Japanese automaker Toyota recently decided to completely withdraw its business from Russia, the market is paying attention to Hyundai Motor Group’s ‘decision’. The St. Petersburg plant in Russia, where Hyundai Motor stopped production on March 1, marked the 210th day of shutdown on the 26th.
According to the industry on that day, Toyota, which is withdrawing its business from Russia, will suspend all production and sales activities through voluntary liquidation instead of selling its local corporation. After-sales service (AS) for already sold vehicles is expected to be maintained for the time being.
Previously, Renault, France, had also transferred a 68% stake in Avtovaz, a local automaker, owned by a local automaker to Russia in May for only ‘2 rubles’. 2 rubles is only regarding 49 won in Korean Won. It was a scene that confirmed Renault’s will not to do business in Russia even if it lost hundreds of billions of won. Among Japanese automakers, Toyota was the first to announce that it would withdraw from its Russian business, and Mazda also announced that it would close its Russian business. Nissan and Mitsubishi have stopped only local production.
Russia accounts for regarding 1% of Toyota’s total global sales. After starting local production in 2007, it also produced the popular sports utility vehicle (SUV) ‘RAV4’ in Korea last year. Toyota, which sold a total of 110,000 vehicles in Russia last year, ranked fourth in market share following Volkswagen.
In response to Toyota’s sudden decision, the auto industry interprets that Toyota, representing Japan, is keeping pace with the Japanese government. An industry official said, “Japan and Germany are the countries that strongly voiced Russia’s expulsion from the permanent members of the Security Council at the recent UN General Assembly. A withdrawal is inevitable,” he said.
As a result, the concerns of Hyundai Motor Group, the second largest in the Russian market, are deepening. It is also unclear when Hyundai Motor’s Russian plant, which has stopped operating, will be able to resume production. According to Hyundai Motor Group’s overseas plant sales announcement, the sales of the Russian subsidiary (HHMR) were 17,649 units in January this year and 17,402 units in February this year. Finally, last month, the number of units sold was ‘0’. The Russian engine plant of Hyundai Wia, a parts affiliate that opened last year, was also shut down abruptly, causing losses at the local subsidiary.
Korea Investors Service estimates that the share of the Russian market (2.9%) in Hyundai Motor Group’s total overseas subsidiaries’ sales is not large, and the impact on the group’s overall performance is not expected to be significant due to improved profitability in other regions such as the United States. A Hyundai Motor official said, “The current production suspension will continue for the time being because the plant is not operating normally due to problems with parts supply.”
By Oh Kyung-jin
