RUSSIA REPORT
The South Korean company Sungwoo Hitech, a manufacturer of auto components that is part of the Hyundai group, has purchased an abandoned Ford plant in Vsevolzhsk.
Details of the deal have not disclosed. However, the plant, which is partly stripped and which has been idle for two years, is being sold for US$ 20 million, a total considered to be far below market value.
For now, the new owner said it is not planning to resume car production there, but the company said it is going to rehab the plant and start production in 2023. Sungwoo Hitech said at this time it plans to invest about US$ 70 million and employ 520 people. Production capacity will be about 265,000 units per year.
Sungwoo Hitech has been working in Russia since 2010. With production in Leningrad region, it supplies the Hyundai plant with bumpers and frames for car doors.
PSR Analysis: The trend of Western car makers yielding the Russian market to companies from Asia is clearly visible. However, this purchase is puzzling because it’s not clear what product the new owner is going to produce in the plant. PSR
Maxim Sakov is Market Consultant – Russia Operations for Power Systems Research
