Is Hyundai selling its factory in Russia, worth $1 trillion, for only 140,000 won (approx. $108)? No, that's not true: While the Hyundai factory in Russia is being sold, its actual value reportedly stands at 287.3 billion won (approx. $223 million).
The claim originated from a video (archived here) published on TikTok by @suzingmm on December 20, 2023. The caption in the video, translated from Korean into English by Lead Stories staff, reads:
1 trillion dollar factory for 140,000 won
To the number one salesperson (Yoon) Seok Yeol
This is your grade.
This is what the post looked like on TikTok at the time of writing:
(Source: TikTok screenshot taken on Fri Dec 22 14:38:34 2023 UTC)
According to a press release by Hyundai (archived here), on December 19, 2023, the Korean company approved the sale of the Russian plant. Several Korean news outlets, including Donga News (archived here), Chosun Ilbo (archived here), and Hankyoreh (archived here), reported on Hyundai Motor Company selling its Russian plant for 140,000 won. However, there is no evidence supporting the TikTok video's claim that the Russian plant is worth 1 trillion dollars.
The St. Petersburg plant, inactive since March 2022, incurred 1.13 trillion won (approx. $ 877 million) in losses due to the Russia-Ukraine War, as reported by Hankyoreh. Additionally, Chosun Ilbo notes Hyundai's intention to sell the General Motors plant in St. Petersburg, acquired for 50 billion won in 2020. It also reported that the book value of Hyundai Motor Company's Russian plant is approximately 410 billion won, while Donga News, along with Hankyoreh, reported a market value of 287.3 billion won (approx. $223 million).
Investopedia defines market value as the company's valuation based on the stock market, while book value represents the amount shareholders would receive after liquidating assets and settling liabilities. In instances where the market value falls below the book value, such as observed with Hyundai Motor Company's Russian plants, it signals a lack of confidence from the stock market in the company's perceived worth as stated in its financial books.
The sale at a loss of $219 million of Hyundai in Russia is in line with a broader trend observed among Western car companies selling at a loss and exiting the country.
