Hyundai Kia Motors Aims for No.1 Market Share in Russia

[Asia Economy Reporter Suyeon Woo] Hyundai Motor Group is aiming for the No. 1 market share in Russia by pursuing the acquisition of the Russian GM plant. Hyundai Kia Motors has set a goal to raise its current 2nd and 3rd place market shares to 1st place through the expansion of production facilities.

According to the Association of European Businesses (AEB) on the 15th, in July, Kia Motors sold 18,038 units in the Russian market, securing 2nd place with a 12.7% market share, while Hyundai Motor sold 14,319 units, ranking 3rd with a 10% share. During the same period, the No. 1 market share was held by the Russian local company AvtoVAZ (Lada) with 21.9%.

Looking at automakers by group, the AvtoVAZ-Renault-Nissan-Mitsubishi alliance group ranked 1st with a 37.3% market share, and Hyundai Motor Group was 2nd with 22.9%. Hyundai Motor Group, which secured 2nd place ahead of German (Volkswagen Group 17.5%) and Japanese cars (Toyota 8%), has recently planned to expand sales through the acquisition of local production facilities in Russia.

Hyundai Motor Russia Factory Production Line

According to local media such as Reuters on the same day, the Russian antitrust regulatory authority recently approved Hyundai Motor Group's acquisition of the Russian GM plant. This approval is a procedure to examine whether Hyundai Motor Group's acquisition of the plant violates local antitrust laws. However, additional procedures remain, including full price negotiations with GM and approvals from other Russian government departments for the complete acquisition.

This push to acquire the plant reflects Hyundai Motor Group's confidence in targeting the Russian local market, which has sufficient potential through the expansion of production facilities. The Russian market, which had contracted due to the COVID-19 pandemic, turned to a rebound in July, and Hyundai Kia Motors is closely chasing local companies with 2nd and 3rd place market shares.

If the acquisition of the GM plant is finalized, Hyundai Motor Group will establish production facilities in Russia with an annual capacity of 300,000 units. Currently, Hyundai Motor's Russian plant has an annual production capacity of 200,000 units and was the only overseas plant of Hyundai Motor to achieve an over-utilization rate (119%) last year. This indicates that the production supply facilities are insufficient compared to local market demand. Additionally, the Hyundai Motor Russian plant also produces the Kia Rio (Pride), which ranked 3rd in popularity in the Russian market this year.

Industry insiders view Hyundai Kia Motors' push to acquire the GM plant as a stepping stone to raising its market share to No. 1 in Russia. The GM Russia plant, located near Saint Petersburg, Russia, is a facility capable of producing up to 100,000 units annually but has been shut down since 2015 due to GM's global production reduction policy.