No Cars for Rubles
The exports of domestic automobile companies to Russia are plummeting because of the weak ruble.
According to the Korea Automobile Manufacturers Association on Mar. 1, the amount of Russian exports from five domestic car makers totaled 3,097 units in January, 71.5 percent of the same period last year (10,862 units).
The decrease in exports to Russia also affected the exports to neighboring countries in Europe but outside of the E.U. Exports to non-E.U. European countries in January amounted 6,591 units, a 62.9 percent reduction from last year.
This reduction affected all auto exporters equally. Hyundai Motors decreased to 2,691 units this January from 5,622 units last year; Kia Motors dropped to 2,417 units from 4,417; and GM Korea fell 1,363 units from 6,688.
All three carmakers indicated that the inability to break even with sales were the reason for sharply reducing shipments to Russia.
In fact, Kia Motors expressed that it is hard to make a profit in Russia because of weak ruble at the fourth quarter performance conference held in January. However, Kia has a different Russian strategy, which is concentrating on selling the locally-produced Rio (a.k.a Pride in Korea) to maintain its Russian sales network.
With this strategy, Kia Motors made progress by selling 11,346 cars in the Russian market, which is 1 percent higher than the same period last year. Hyundai Motors sales also increased 15 percent with 12,707 units sold this January due to favorable sales of their locally-produced Solaris (a.k.a Accent in Korea).