South Korea’s second-largest carmaker, Kia, might become the latest OEM to shutter its operations in Russia due to the country’s prolonged geopolitical tensions with Ukraine, a company executive said.
Woo-Jeong Joo, Executive Vice President, Kia Corp, in an earnings call said, “If you ask me one negative factor for sales, I would say volatility in Russia may accelerate next year and the automobile market itself may completely shut down for a while,”
“We may consider doing an after-service business only, because we basically can’t supply cars there”, he added.
In Q3 FY2023, the company reported a 60 percent plunge due to engine-related provisions in its net profit, which stood at 458.89 billion won, as compared to the 1.13 trillion won in the corresponding quarter a year ago.
As per Association of European Businesses (AEB) sales figures, Kia had sold 159,729 cars in Russia in the January-September period in 2021 with a market share of 12.7 percent. However, its sales experienced a drastic downfall of 64.4 percent as it stood at 56,791 units in the same period in 2022.
Nevertheless, the company remains the country’s second-largest car seller, trailing behind Russian state-owned manufacturer Lada. Last year, Kia dominated the Russian Car of the year announcements, bagging the top honours in six categories including minivans, mid-size SUVs, and compact SUVs.
If Kia’s fears turn into reality and it rubber-stamps its exit from Russia, it will be joining the likes of Volkswagen Group, Toyota Motor, Renault, Nissan, and Mazda Motor, who are also planning to terminate their operations in the country.
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