By on May 14, 2015

2016 Rio  SX

As Russia continues to struggle with its economic health, Hyundai Group is doing its part to keep the nation’s auto sales afloat.

According to a representative, “Russia is one of the major and important markets for Hyundai (Group),” Ward’s Auto reports. The group’s Hyundai and Kia brands hold a combined 19.9 percent of the nation’s automotive market in Q1 2015, with Hyundai holding 10.4 percent and Kia 9.5 percent.

Despite the maelstrom sweeping through the market, Hyundai Group has managed to fare well against the economic storm compared to other automakers. Analysts and industry-watchers suggest this is due to factors such as proper product placement, a beneficial global strategy, and its ability to play the game driving Russia’s auto industry.

The group also took home the gold in deliveries over the recent quarter, moving a combined 75,871 vehicles out of the showroom. Local automaker AvtoVAZ pulled up in second with 68,554 in the same period, while Renault-Nissan took bronze with 65,657 combined deliveries. Meanwhile, BMW is reconsidering plans to build a factory in Russia, and General Motors is shutting down local production and withdrawing its Chevrolet and Opel brands from the market.

Within the group, the Kia Rio has done wonders for the bottom line, especially for the Kia brand. Produced locally at the Hyundai Motor Manufacturing Russia facility in St. Petersburg, the Rio accounted for 44 percent of overall production — 104,700 units — and 48 percent of all the brand’s sales in the market during 2014.

Though the country’s economic woes are expected to worsen in 2015, a Kia representative says market share for the brand is likely to continue trending upward, having gone from 7.1 percent in 2013 to 7.9 percent last year; current projections through February 2015 point to a 9.8-percent share by the end of the year. Hyundai remains mum on yearly forecasts, but believes it will continue to fare well, also, thanks in part to government incentives for both consumers and the industry as a whole.

[Photo credit: Kia]

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11 Comments on “Hyundai Group Riding High Amid Russian Economic Maelstrom...”


  • avatar
    Arthur Dailey

    South Korea and Russia co-operating?

    Guess that it is true that money has no loyalty.

  • avatar
    Sjalabais

    So how do they make money while others don’t?

    Renault-Nissan has local factories, and I thought GM had, too? That partially offsets the trouble with the rouble, but why would just one conglomerate know how to navigate these seas?

    • 0 avatar
      heavy handle

      Just a guess: Hyundai are willing to take a hit on exchange rates in the short term in order to gain market share in the long term.

      • 0 avatar
        tonycd

        This is plausible, because Hyundai’s Korean government backing lets them take the long view where American makers (for example) can’t, and because Hyundai is big enough to take the hit.

        Hyundai is, in fact, really big. Much bigger than Honda, and much bigger than most people realize. They’re a multi-billion dollar conglomerate that’s a major player in shipbuilding and other industries that aren’t consumer-facing. Carmaking is almost a sideline for them. They can afford to play the long game.

        • 0 avatar
          Sjalabais

          That’s true, for sure. It still surprises me that they let a car company play the long game – imho the entire business feels way too shaky for that. All the big automakers run on quite narrow margins.

          With almost all suppliers asking for hard currency, there is real money to be lost here, too. I can only reiterate how the ruble has made the Lada Kalina Europe’s cheapest car at 6995€. Okay valye for a sh*y five seater.

    • 0 avatar
      ect

      AFAIK, GM does not have local manufacture in Russia but Avtovaz assembles CKD vehicles. Hence, the content is all imported, which became problematic when the ruble devalued.

      Couldn’t swear to this, though – others will have more knowledge.

      • 0 avatar
        Sjalabais

        It’s probably just a Wikipedia article away, but with GM still making the Opel Kadett/Pontiac LeMans under the Daewoo brand in Aserbajdsjan, I just assumed they’d do something similar in Russia, too…

  • avatar
    Onus

    Hyundai and Kia are very aggressive on pricing here.

    I currently have the new Kia Rio ( Chinese model is the one sold here ) advertised for 535,000 руб. Whereas the the Hyundai Solaris ( accent ) looks to be for sale for 10,000 руб. less. If you compare this to lada and Renault / Nissan they cost about 100,000 more. But are still quite affordable. I could see a Russian having no problem spending slightly more for better perceived value.

    The ruble also had been gaining traction and it’s value add risen quite dramatically. Just yesterday it dropped below 50 Rub per USD.

    • 0 avatar
      Sjalabais

      It’s an improvement, but it’s not quite back yet:
      http://www.xe.com/currencycharts/?from=RUB&to=USD&view=1Y

      I’ve been browsing for GAZ 24 and for a while there you could get quite nice, gas converted ones for 60,000 руб. Just didn’t get the opportunity to travel to Russia..

      • 0 avatar
        Onus

        Those are pretty nice.

        Been trying to figure out what i want to take home and all the logistics, red tape, and such that will be involved. Currently looks like i’ll either have to drive to finland or germany to get it put on a ship.

        Thinking of either a niva, uaz 469, or Bukhanka. The Bukhanka would be super neat to have at home.

        It’s not to expensive to fly into Moscow to New York. Much cheaper than western europe. Though flights are currently getting reduced due to less russians traveling.

        • 0 avatar
          Sjalabais

          I think the Niva would be the easiest to keep alive – and eventually to sell, too. 469’s do not have the…eh…strong reputation of the competing Lada. But I love the Bukhanka’s myself – they are still sold new as military vehicles in the Czech Republic; thus earning a valuable EU certificate. Pretty impressive offroad package.

          Are you an American in Russia? When will you go back?

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