Return entry: Hyundai and Kia are exploring the prospects of returning to Russia

Two of the largest South Korean automakers, Hyundai and Kia, are interested in returning to the Russian market, the Ambassador of the Republic of Korea Lee Seok-pae told Izvestia. The main obstacle to this, according to the diplomat, remains the unresolved Ukrainian conflict. But Seoul is also largely guided by Washington's position and is afraid of American sanctions, experts stressed. However, even if the restrictions are lifted, it will not be easy for companies to return on the same terms. In four years, Hyundai sold its Russian factories, and Chinese brands occupied a significant part of the market.

Hyundai and Kia want to return to Russia

Until 2022, Hyundai and Kia, members of the Hyundai Motor Group, occupied the second and third places in car sales in Russia, after Lada. After the sanctions were imposed, they suspended production and supplies. Nevertheless, companies are considering the possibility of returning to the Russian market, the Ambassador of the Republic of Korea Lee Seok-pae told Izvestia.

— As far as I know, Hyundai Motors and Kia Motors are still extremely interested in the Russian automotive market. And I believe that they may be conducting market research on how to return to Russia," the diplomat said.

According to Izvestia, automakers are consulting with the South Korean Embassy on the Russian market. The editors sent requests to both companies asking them to confirm this information and comment on their plans to return to the Russian Federation.

According to Lee Sok-pae, the resumption of full-fledged work of companies in Russia will depend primarily on the settlement of the Ukrainian conflict.

— I believe that for Hyundai Motors or some other South Korean car companies, returning to the Russian market before the end of the Ukrainian crisis may be a very difficult task. The settlement of the conflict is the main condition for returning," the diplomat said. — But, again, South Korean automakers are still very interested in the Russian automotive industry and car manufacturing. As far as we know, based on this interest, they are considering a follow-up plan.

South Korean business expects a change in the international situation and an easing of sanctions, said Alexandra Zueva, an expert at the Center for Military-Economic Research at the Institute of World Military Economics and Strategy at the National Research University Higher School of Economics. Seoul is largely guided by Washington's position, since the American market is much more important for Korean automakers than the Russian one. Possible secondary US sanctions pose a more serious threat to them than the loss of customers in Russia, she noted.

In this situation, companies are currently limited to re-registering trademarks in order to preserve brand rights. In September, Kia registered nine trademarks in Russia in the form of the company's logo, according to Rospatent data. Hyundai — 10 more signs, including those under the Genesis brand.

The prospects for the return of foreign business are also negatively affected by the general deterioration in the background of bilateral relations after 2022. Although, on the other hand, South Korea's policy cannot be equated with the position of the Baltic republics, Poland or some other European countries. As an example, we can mention the interest in the Northern Sea Route. On October 11, the South Korean container ship PanStar Acro completed its first test flight from Busan to Europe and back through the Russian Arctic. Nevertheless, Seoul joined the anti-Russian sanctions, closed its airspace to Russian airlines and significantly restricted mutual trade with Moscow.

"There are no significant changes in the model of relations between Russia and the Republic of Korea that has developed since 2022,— Russian Ambassador to Seoul Georgy Zinoviev told Izvestia.

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Under what conditions can Hyundai and Kia return

During the four years of absence of Hyundai and Kia, their working conditions in Russia have changed significantly. In 2024, Hyundai sold its St. Petersburg plants to the AGR group, and in January 2026, the deadline for their repurchase expired. The South Korean company did not use it, citing geopolitical difficulties. Meanwhile, the vacated positions in the market were occupied mainly by Chinese manufacturers.

Even after the lifting of sanctions, South Korean automakers will actually have to rebuild their business in Russia, says Sergey Udalov, executive director and editor-in-chief of the website of the analytical agency Autostat. To do this, they will need new investments and agreements. At the same time, South Korean companies are unlikely to be ready to re-organize the assembly of cars in Russia in the current conditions. An alternative would be to import ready-made machines, but this option is also associated with serious restrictions, the expert added.

The main problem is competition with manufacturers who have already started producing cars in Russia. Local assembly gives them certain economic advantages, while imported cars are additionally subject to duties, VAT and recycling fees.

At the same time, the demand for Korean cars remains, but the price remains the decisive factor, Udalov stressed. Due to the additional payments, Hyundai and Kia imported from abroad will find it difficult to compete with cars that are assembled directly in the Russian Federation.

During the years of the absence of Korean manufacturers, the structure of the car market has also changed significantly. According to Autostat, Chinese brands accounted for about 19% of new passenger car sales in 2022. In 2024, their share reached 58%, and in the first half of 2026 it amounted to 41%.

In January – September 2026, 967.8 thousand new passenger cars were sold in Russia, which is 8% more than a year earlier. Lada remained the market leader with a share of about a quarter of sales, followed by Haval and Tenet. Hyundai and Kia are not among the top ten largest brands.

The high cost of cars, loans, and a further increase in recycling fees limit the market's growth opportunities, Udalov stressed. This means that even with the return of Hyundai and Kia, they will have to compete for buyers in conditions of limited demand. However, the potential capacity of the Russian market is significantly higher than the current figures. Under more favorable economic conditions, 1.8–2 million new cars could be sold annually in the country. This requires, first of all, a reduction in the key interest rate and cheaper car loans, he concluded.

As a result, Hyundai and Kia's problems with Russia are not limited to sanctions. Even in the event of an end to the conflict and their subsequent mitigation, South Korean automakers will have to face many challenges, some of which will be related not to politics, but to structural market changes in the Russian Federation.