Hyundai is ready to make an investment of around $427 million in Russia

Hyundai is ready to make an investment of around $427 million in Russia

Prime – South Korean car manufacturer Hyundai is ready to make an investment of around 27 billion rubles (around $427 millions) within the framework of the special investment contract (SPIC) in Russia. The company has made an application to the Russian Ministry of Industry and Commerce, for the conclusion of a special investment contract on the 5th of June. Hyundai is prepared to invest around 27 billion rubles in the project, as told by the deputy head of the Ministry of Industry and Commerce: Georgy Kalamanov to RIA Novosti, during the Russian-Korean Business Forum.

As part of the SPIC, the company plans to build an engine factory with an annual capacity of 150,000 units in St. Petersburg within the next three years. 1.6 lt Gamma engines will be manufactured in the plant. The engines will equip the most popular Hyundai and KIA models in Russia: Solaris, Creta and Rio, alongside a number of other models produced by the company.

“The preliminary amount will be around 27 billion rubles” – said Kalamanov as a response to the question about the amount of investment to be made by the Korean side in the project. The application has been filed on the 5th of June. We are following the procedure carefully, which we will carry out as a whole” – said Kalamanov.

The plant will be built in 2021, within the framework of a prospective special investment contract to be signed with the government, as told by the director of external affairs at Hyundai: Viktor Vasiliev in March. According to Vasiliev, the investment in the plant will be provisionally higher than the company’s closest competitors – Volkswagen and Ford, which invested $250 and $270 million in their engine plants respectively in 2015.

The negotiations with the government on the conclusion of the SPIC are running with difficulties, the executive director of Hyundai Motor CIS: Alexei Kalitsev complained. The company is covered by an industrial assembly agreement this year and negotiations are being carried out since last year, with regards to a new interaction regime with the government.