Hyundai Ioniq 5 Prepares for Sale in Russia... What Is the Background for Maintaining Its Presence?

3-Year Sales Approval
Preparation in Advance After Normalization

Hyundai Motor Company's exclusive electric vehicle Ioniq 5

[Asia Economy Reporter Choi Dae-yeol] Hyundai Motor's first dedicated electric vehicle, the Ioniq 5, has received certification for sale in Russia. Despite challenging circumstances such as halting operations at local factories following the invasion of Ukraine earlier this year, the company appears to be preparing for post-normalization by sending vehicles produced at nearby regional plants to Russia.

On the 14th, local media and industry insiders reported that the vehicle type approval for the Ioniq 5, which the company obtained last month, has recently come into effect. The certification is said to be valid for three years. To manufacture or sell new cars in the Eurasian Economic Union (EAEU), including Russia, Kazakhstan, and Armenia, vehicles must pass local safety standards and receive approval from local authorities. A company official stated, "Since sales in Russia are currently difficult, we obtained the certification with sales in neighboring countries in mind first."

Originally, Hyundai Motor had announced plans to launch the Ioniq 5 in Russia earlier this year, but all local business plans have been put on hold due to the war. Among Hyundai's global vehicle assembly plants, the Saint Petersburg plant in Russia, which was considered one of the highest operating rate plants, stopped operations in March. Since July, no finished vehicles have been produced or sold from the local factory.

Although there is no production volume from the local plant, Hyundai and Kia's sales networks are still maintained. According to data from the European Business Association, Kia sold 3,113 units and Hyundai sold 1,996 units (including Genesis) last month. Although this is about 70-80% smaller compared to the same period last year, the presence is still maintained. This contrasts with many global automakers withdrawing from Russia or ceasing local sales due to difficulties in sourcing parts after the invasion of Ukraine.

With prolonged sanctions led by the US and Europe, the Russian government has introduced market promotion measures such as significantly increasing parallel import items in the automobile and parts sectors and reintroducing sales incentive loan programs. Hyundai and Kia are responding to local demand by sending vehicles produced at their Turkish assembly plants or Kazakhstan semi-knockdown (CKD) plants to Russia. The new car market in Russia, where many global automakers have withdrawn, is being filled by local brands and Chinese companies. As of last month, the top five sellers were all Russian or Chinese brands. Hyundai, having held a high market share in Russia before the war and having heavily invested to establish production and sales infrastructure, is not hastily deciding to withdraw from the local market.

This content was produced with the assistance of AI translation services.