The Russian government has approved the sale of General Motors‘ St. Petersburg Assembly plant to South Korean automaker Hyundai.
Last week it was revealed that Hyundai had agreed to purchase the defunct assembly plant from GM for an undisclosed sum, but the transaction was still pending the approval of the Russian anti-trust body. At the time, the company said the government would “decide whether Hyundai will move to the next step after reviewing the documents,” in the coming days, with Russia giving the sale the green light on Wednesday.
According to The Korea Times, Hyundai has purchased a 94.83 percent stake in the plant. The automaker still has to negotiate a final price with GM for the facility, the publication also said, and has other government requirements it must meet before taking full ownership of the facility.
Hyundai and its Kia brand have seen strong sales in Russia in recent years as the country’s economy continues to rebound. The two brands sold a total of 404,710 vehicles in Russia in 2019, making Hyundai/Kia the best-selling automaker locally. The Korean company even outpaced local automaker Avtovaz, which only managed to move 362,352 vehicles in 2019. Avtovaz owns the rights to the long-standing Russian vehicle brand Lada.
“The Russian automobile market is showing signs of a solid recovery following government’s policies to boost the economy and support the automobile industry,” Hyundai said in a statement sent to The Korea Times this week. “This is leading to a recovery in Hyundai Motor sales there. For instance, we have raised the price of the Creta crossover twice to protect profitability following oil price declines, but the model is still popular.”
In a previous statement, Hyundai said it planned to “expand market share and defend profitability with the Creta SUV at the center,” in Russia throughout 2020. The Creta, a front-wheel-drive subcompact crossover, is sold as the Venue in the United States and Canada.
The GM St. Petersburg plant was built at a cost of $300 million back in 2008 and was closed in 2015. The plant produced the Chevrolet Cruze, Opel Astra and global Chevrolet Trailblazer and had an annual capacity of around 100,000 units.
While GM maintains a small presence in Russia, it only sells vehicles under the Cadillac luxury brand in the country. Cadillac vehicles sold in Russia are not made there, but rather shipped in from outside GM plants.