Why is Kia actually fleeing from Russia to Kazakhstan
- August 21, 2023
- 0
As it turned out unexpectedly, a month and a half ago, the Russian representative office of Kia quietly registered its subsidiary in Kazakhstan – Kia Russia and CIS
As it turned out unexpectedly, a month and a half ago, the Russian representative office of Kia quietly registered its subsidiary in Kazakhstan – Kia Russia and CIS in the Republic of Kazakhstan LLC. The AvtoVzglyad portal reflects why the Korean company had to carry out this “secret” operation and how it threatens the domestic car market.
As Korean cars evolved from absurd bobcats to respectable vehicles, their popularity skyrocketed in Russia. At the end of 2021, Kia and Hyundai confidently occupy second and third places in sales. It was entirely in their power to drive the great and terrible LADA from its leadership positions, which, it seemed, was not subject to any blow of fate. Many experts timidly began to stutter that Korean cars were equal in quality to Japanese ones, and even surpassed them in design.
The broad road came to a dead end
It seems that the Hyundai Motor Group had a broad road to a bright future – know that you have to explore the vast expanses of one of the largest countries in the world. But it wasn’t there. When the United States seriously started waging a sanctions war against Russia, all countries did not get it like a child. The satellites of the hegemon were particularly affected, including South Korea on fairly legal grounds.
Not wanting to lose a huge market in which a lot of energy, labor and finance had been invested, the Koreans bravely resisted the pressure from across the ocean and tried to negotiate for themselves exceptions, concessions or, in the worst case, certain preferences. They quietly brought here trains with cars and spare parts, refused to sell their St. Petersburg plant, assured of the inviolability of the warranty service system.
However, all these desperate gestures did not help to maintain a profitable and large-scale enterprise. It was doomed from the very first moment when the thin boat of Korean politics was in the wake of a US aircraft carrier, which lay in half on the legitimate economic interests of a kind of Korea. Stopped on March 1, 2022, the Sestroretsk plant conveyor never launched.
We have nothing to do here
After long attempts to mislead America’s watchful eye, Kia gave up and opened a representative office in unsanctioned Kazakhstan. There, the company will resume “direct operations,” whatever that wording means.
“Official sales in Russia have been stopped, and what comes through parallel imports are “Michurin’s tears”. As far as I know, some firms moved to Kazakhstan a long time ago. Now, apparently, other companies will look there. The main sales are there, especially because Kia will have an assembly plant in Kazakhstan. And here they have nothing to do today,” auto expert Igor Morzharetto told Gazeta.Ru.
You can’t argue with an expert about “nothing to do”, although for some reason the company kept its representative office in Russia, albeit in an extremely limited composition. Apparently the Koreans are still hoping that somehow it will sort itself out on its own. But the question arises: what should they do in Kazakhstan?
wishful thinking
A giant like Kia cannot count on the home market of this Central Asian country. According to the results of July 2023, 17,609 cars were sold there, according to the Avtostat agency – which is 61.5% more than a year ago for the same month. And in a more or less calm, although not fruitful 2021 in Russia, Kia alone sold 17,071 cars in July, with a total market volume of 132,640 cars. Yes, what can we talk about, if even in the current extremely difficult situation, 95,654 new cars were registered in our country last month, according to the same Avtostat. As they say, feel the difference.
If we pin our hopes on the breathtaking expansion of production of the Allur plant (former SaryarkaAvtoProm) in Kostanay, then the Kazakhs cannot digest such a number of cars. Export to Russia – yes. One could have a good time here. However, given the “friendliness” of Kazakhstan towards Russia, which he stubbornly and constantly demonstrates, the first stern cry from Washington will immediately close the supply channel like a rivet. And there will be a scream – do not go to the grandmother. Allies are allies.
Photo: globallookpress.com
Photo: globallookpress.com
As Korean cars evolved from absurd bobcats to respectable vehicles, their popularity skyrocketed in Russia. At the end of 2021, Kia and Hyundai confidently occupy second and third places in sales. It was entirely in their power to drive the great and terrible LADA from its leadership positions, which, it seemed, was not subject to any blow of fate. Many experts timidly began to stutter that Korean cars were equal in quality to Japanese ones, and even surpassed them in design.
The broad road came to a dead end
It seems that the Hyundai Motor Group had a broad road to a bright future – know that you have to explore the vast expanses of one of the largest countries in the world. But it wasn’t there. When the United States seriously started waging a sanctions war against Russia, all countries did not get it like a child. The satellites of the hegemon were particularly affected, including South Korea on fairly legal grounds.
Not wanting to lose a huge market in which a lot of energy, labor and finance had been invested, the Koreans bravely resisted the pressure from across the ocean and tried to negotiate for themselves exceptions, concessions or, in the worst case, certain preferences. They quietly brought here trains with cars and spare parts, refused to sell their St. Petersburg plant, assured of the inviolability of the warranty service system.
However, all these desperate gestures did not help to maintain a profitable and large-scale enterprise. It was doomed from the very first moment when the thin boat of Korean politics was in the wake of a US aircraft carrier, which lay in half on the legitimate economic interests of a kind of Korea. Stopped on March 1, 2022, the Sestroretsk plant conveyor never launched.
We have nothing to do here
After long attempts to mislead America’s watchful eye, Kia gave up and opened a representative office in unsanctioned Kazakhstan. There, the company will resume “direct operations,” whatever that wording means.
“Official sales in Russia have been stopped, and what comes through parallel imports are “Michurin’s tears”. As far as I know, some firms moved to Kazakhstan a long time ago. Now, apparently, other companies will look there. The main sales are there, especially because Kia will have an assembly plant in Kazakhstan. And here they have nothing to do today,” auto expert Igor Morzharetto told Gazeta.Ru.
You can’t argue with an expert about “nothing to do”, although for some reason the company kept its representative office in Russia, albeit in an extremely limited composition. Apparently the Koreans are still hoping that somehow it will sort itself out on its own. But the question arises: what should they do in Kazakhstan?
wishful thinking
A giant like Kia cannot count on the home market of this Central Asian country. According to the results of July 2023, 17,609 cars were sold there, according to the Avtostat agency – which is 61.5% more than a year ago for the same month. And in a more or less calm, although not fruitful 2021 in Russia, Kia alone sold 17,071 cars in July, with a total market volume of 132,640 cars. Yes, what can we talk about, if even in the current extremely difficult situation, 95,654 new cars were registered in our country last month, according to the same Avtostat. As they say, feel the difference.
If we pin our hopes on the breathtaking expansion of production of the Allur plant (former SaryarkaAvtoProm) in Kostanay, then the Kazakhs cannot digest such a number of cars. Export to Russia – yes. One could have a good time here. However, given the “friendliness” of Kazakhstan towards Russia, which he stubbornly and constantly demonstrates, the first stern cry from Washington will immediately close the supply channel like a rivet. And there will be a scream – do not go to the grandmother. Allies are allies.
Source: Avto Vzglyad
Donald Salinas is an experienced automobile journalist and writer for Div Bracket. He brings his readers the latest news and developments from the world of automobiles, offering a unique and knowledgeable perspective on the latest trends and innovations in the automotive industry.
