Analysis of the Impact of Hyundai Motor's Exit from the Russian Market on Global Business Layout and Stock Valuation

Hyundai Motor faced severe geopolitical challenges following the Russia-Ukraine conflict. Its manufacturing plant in St. Petersburg has been idle since March 2022, and was sold to Russia’s AGR Automotive Group at a

at the end of 2023, with a two-year repurchase option included in the transaction [1]. At the end of December 2025, Hyundai Motor confirmed that it , which would expire in January 2025 [1].

According to brokerage data, this asset disposal resulted in an

for Hyundai Motor [1].

Impact Item	Amount	Explanation
Asset Sale Loss	287 billion KRW (≈ 219 million USD)	Impairment loss from selling Russian factory in 2024 [1]
Annual Plant Capacity	Over 200,000 units	St. Petersburg plant capacity [3]
Historical Market Share (2019)	23% (Hyundai + Kia)	Once Russia’s largest foreign automaker [3]

According to Hyundai Motor’s 2024 financial data [0]:

• Total Revenue
  : 175.2 trillion KRW (≈ 125 billion USD)
• Net Profit
  : 13.23 trillion KRW (≈ 9.45 billion USD)
• Total Assets
  : 339.8 trillion KRW

:

• Asset impairment loss as % of total revenue: ~0.16%
• Asset impairment loss as % of net profit: ~2.3%
• Conclusion:
  Limited impact on overall financial health

• 2024 Russian Market
  : Total sales of 1.6 million units [3]
• Hyundai Motor Global Sales (2024)
  : 4.142 million units [0]
• Russian Market Share of Global Sales
  : ~1.89% (assuming historical data)
• Actual Financial Impact
  : Since Russian operations were suspended in 2022, the
  actual impact in 2024-2025 is a one-time accounting loss

According to Hyundai Motor’s Sustainability Report [2]:

Market	Sales Share	Strategic Position
North America	28.76%	Core growth market, main force in electrification transformation
South Korea	17.02%	Domestic market, stable profit contributor
Europe	14.71%	Second largest market, leading in electrification
India	14.62%	Growth engine in emerging markets
Central and South America	7.62%	Developing market
Middle East/Africa	7.55%	Emerging market
Asia-Pacific	5.24%	Regional market
China	3.02%	Highly competitive market

: The Russian market has disappeared from the main sales regions, and Hyundai Motor has successfully shifted its business focus to the three high-growth markets of .

Q3 2025 data shows [2]:

• Global Electrified Vehicle Sales Growth
  : 37%
• North America Electrified Vehicle Sales
  : 94,786 units, up 52.6% YoY
• North America Electrification Penetration
  : 30.1%
• Conclusion
  : Electrification transformation successfully offsets the impact of exiting the Russian market

: The chart above shows the stock price trend of Hyundai Motor (005380.KS) from January 2022 to December 2025, marking key events such as the outbreak of the Russia-Ukraine conflict, the suspension of Russian factory operations, the sale of the factory, and the expiration of the repurchase option. The bar chart below shows daily trading volume, with red bars indicating down days and green bars indicating up days.

[0]:

Time Point	Event	Stock Price Reaction
2022-02-24	Outbreak of Russia-Ukraine conflict	Short-term volatility
2022-03	Russian factory suspended operations	Market gradually digested
2023-12	Sold Russian factory	Limited impact
2024-2025	Accelerated electrification transformation	Stock price continued to rise
Current Stock Price (2025-12-30)	296,500 KRW	Annual increase of +40.19%

According to brokerage data [0]:

Indicator	Value	Valuation Level
P/E Ratio	7.33x	Significantly undervalued
P/B Ratio	0.64x	Below book value
ROE	9.66%	Healthy level
Net Profit Margin	5.90%	Reasonable level
Market Capitalization	66.73 trillion KRW	Top 5 global automakers

According to DCF model valuation [0]:

Scenario	Intrinsic Value (KRW)	Premium Over Current Price	Probability
Conservative	4,350,367	+1,367%	20%
Base	10,098,907	+3,306%	60%
Optimistic	11,946,918	+3,929%	20%
Probability Weighted	8,798,731	+2,868%	-

: The extreme premium shown by the DCF model may stem from model assumptions or data issues; actual market valuation may be more conservative.

:

• The current market uses
  relative valuation methods
  , considering geopolitical risks to be long-term
• P/B <1.0 indicates market discount for emerging market risks
• P/E=7.33x is significantly lower than the global peer average of over 15x

Risk Type	Impact	Response Measures
Supply Chain Disruption	Medium	Diversified supply chain layout
Brand Reputation Risk	Medium-High	Withdrawal in line with ESG standards
Asset Impairment Risk	High (already occurred)	Quick disposal to stop losses
Future Market Access	Low-Medium	Indirect entry via Chinese brands

:

1. Successful Risk Isolation
   : Avoid deeper sanctions and supply chain disruptions
2. Resource Reallocation
   : Resources directed to high-growth markets (North America +37% electrification growth)
3. Enhanced ESG Reputation
   : Aligns with international expectations for withdrawal from Russia
4. Controllable Financial Impact
   : One-time loss of $219 million, accounting for <3% of profit

:

1. Permanent Market Loss
   : Russian market dominated by Chinese brands (62.5% share in 2024 [3])
2. Repurchase Right Invalidated
   : Unable to recover assets via repurchase option, loss solidified
3. Geopolitical Premium
   : Market discount for South Korean companies’ geopolitical risks may persist long-term

Factor	Assessment
Financial Impact	Minor (one-time loss already accounted for)
Stock Price Impact	Neutral (already digested by the market)
Business Impact	Positive (resource reallocation)

:

1. North America Market Expansion
   : Q3 2025 North America sales growth of 13.2%, electrification penetration of 30.1% [2]
2. Europe’s Electrification Leadership
   : Aligns with EU’s 2035 ban on fuel vehicles strategy
3. India Market Rise
   : Sales share of 14.62%, becoming the third largest market
4. Technological Leadership
   : Leading industry in electrification and hydrogen technology investment

:

1. China-US Trade Frictions
   : May affect global supply chains
2. Korean Peninsula Geopolitical Risks
   : Unique risk discount for South Korean companies
3. Global Demand Slowdown
   : 1.8% decline in global sales in 2024 [2]

:

• P/E=7.33x
  : Significantly lower than global automaker average
• P/B=0.64x
  : Sufficient safety margin
• Dividend Yield
  : ~2.7% (based on 2024 net profit)

:

• Impact of Russian exit is fully priced in
• Significant results from electrification transformation, strong growth in North America
• Valuation is attractive, but geopolitical risks need attention

Hyundai Motor’s exit from the Russian market is a

in its global strategic adjustment. Although it brought a , in the long run:

1. Controllable Financial Impact
   : Loss accounts for <3% of net profit, no impact on overall financial health
2. Successful Business Restructuring
   : Resources successfully shifted to high-growth markets (North America, Europe, India)
3. Strong Stock Price Performance
   : Annual increase of +40.19%, indicating market recognition of strategic adjustments
4. Attractive Valuation
   : P/E=7.33x, P/B=0.64x, room for revaluation

: Geopolitical risks forced Hyundai Motor to undergo strategic transformation. Although it lost the Russian market, through accelerating electrification and resource reallocation, the company’s growth in core markets such as North America, Europe, and India is sufficient to offset the negative impact. The current stock price has fully reflected the risk of exiting Russia; future growth will depend on the effectiveness of electrification transformation and the recovery of global market demand.

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[0] Jinling API Data - Hyundai Motor (005380.KS) stock price, financial data, DCF valuation
[1] Reuters via Investing.com - “Hyundai not in a position to buy back Russian auto factory, source says” (https://www.investing.com/news/stock-market-news/exclusivehyundai-not-in-a-position-to-buy-back-russian-auto-factory-source-says-4423543)
[2] Hyundai Motor Company - 2025 Sustainability Report / Q3 2025 Earnings Release (https://www.hyundai.com/worldwide/en/newsroom/detail/hyundai-motor-company-reports-strong-q3-2025-performance-4.8%2525-global-growth-driven-by-37%2525-electrified-vehicle-surge-0000001043)
[3] Business Times - “Hyundai not in position to buy back Russian auto factory: source” (https://www.businesstimes.com.sg/companies-markets/transport-logistics/hyundai-not-position-buy-back-russian-auto-factory-source)
[4] Leave-Russia.org - “The List Of International Companies That Are Leaving Russia” (https://leave-russia.org/leaving-companies)