Russians Watched as South Korean Brands Left, but Are They Coming Back? 💰💰💰
Car dealers in Tomsk are not anticipating a swift revival of popularity for Kia and Hyundai models.
In Tomsk, Russia, the return of the South Korean automobile brands that left in 2022 won't happen quickly, despite their previous share of nearly 25% of the market. Local dealership centers (DCCs) are unlikely to agree to a reversal to Korean brands following their switch to Chinese automotive production, according to Tomsk DCC leaders.
Recent headlines from The Korea Times hint at discussions between South Korean companies about returning to the Russian market post-2022 exit. A definitive decision is anticipated only if the ongoing conflict between Russia and Ukraine ceases. Nevertheless, brands like Kia, Hyundai Mobis, and Hyundai Steel have already listed job vacancies in Russia.
"The big question is, where are they coming back from? After all, dealership centers have been restructured for other brands... For instance, we now have Changan here. Tomorrow they (Kia) will show up and say: 'You're out, we're back.'... After a year, we're not ready for that," comments Rustem Davletov, Geely, Changang, Mitsubishi, and Kia DCC manager in Tomsk.
Davletov reminds us that, prior to 2022, the Korean brands Kia and Hyundai dwarfed the competition in the Russian market for new vehicles, and their success was unmatched in other countries. "They certainly didn't want to leave Russia, but politics played a role in their decision," he adds.
The return won't be a snap of the fingers, not even this year. Russia currently has approximately 4,000 "boxes" (DCCs), and around 65% of them are already occupied by Chinese brands. Outlets like Haval have completed a full rebranding, now completely catering to the standards demanded by the importer, leaving no need for further modifications, notes Haval DCC manager, Grigoriiy Elisov.
Prices may rise
Davletov also doubts the capacity of the returning Korean brands to regain their previous slice of the Russian market due to increased costs. Russian authorities have been gradually boosting tariffs on imported cars in recent years, and if the exiting brands decide to restart operations, their products might not be competitive compared to Chinese offerings.
"With the existing markup prices, Russian buyers have extremely low purchasing power. One of the main factors influencing whether a buyer chooses a specific brand will, of course, be the cost of the vehicle. If the cost of returning brands' vehicles is significantly higher than Chinese cars, the choice is yours," adds Davletov.
Additional Insights 🔍
Recent developments contradict each other regarding the possible return of South Korean automakers to Russia:
Kia's Reported Plans
According to an April 14 report, Kia set Russia as a target for its 2025 sales plan aiming to sell 50,000 vehicles, citing the need for market diversification amid global uncertainty[1]. However, Hyundai Motor Group (Kia's parent company) denied these claims on April 15-16, calling them "extreme assumptions" and "not true"[2][4].
Hyundai's Exit Status
Hyundai sold its St. Petersburg plant in late 2022 for 10,000 rubles ($136 equivalent at the time) with a two-year buyback option that expired in late 2024[4]. The company confirmed no active plans for re-entry, stating they stopped responding to "false" Russian media reports[4].
Market Context
- Consumer Demand: 31% of surveyed Russians prioritize Kia/Hyundai's return, topping the list of desired brands[5].
- Logistical Barriers: Russia now heavily relies on Chinese automakers, with imports projected to drop to 700,000 vehicles in 2025 due to tariff hikes[3].
- Industry Skepticism: Experts warn of higher pricing if foreign brands return and emphasize no concrete prerequisites exist for major players to re-enter in 2025[5].
Current evidence suggests no official commitment from either brand to resume operations, despite localized media speculation about Kia's potential re-entry[1][4]. Hyundai appears more definitively withdrawn through its 2022 exit agreement[4].
- Rustem Davletov, manager of Geely, Changan, Mitsubishi, and Kia DCC in Tomsk, voices skepticism about the rapid return of South Korean automobile brands to Russia, stating, "They certainly didn't want to leave Russia, but politics played a role in their decision."
- According to Grigoriiy Elisov, Haval DCC manager, outlets like Haval have undergone a full rebranding, now fully catering to the standards demanded by the importer, making no further modifications necessary.
- Davletov also casts doubt on the ability of the returning Korean brands to retake their previous share of the Russian market due to increased costs, explaining, "If the cost of returning brands' vehicles is significantly higher than Chinese cars, the choice is yours."
- Contrary to recent reports, Hyundai Motor Group (Kia's parent company) has denied plans to return to Russia, calling them "extreme assumptions" and "not true."
- Despite localized media speculation about Kia's potential re-entry, current evidence does not indicate any official commitment from the brand to resume operations, and Hyundai appears more definitively withdrawn through its 2022 exit agreement.
