Third run: Korean cars return to Russia

South Korean automaker SsangYong has returned to Russia under the KGM brand (for the third time). Sales of three models of this brand will start in early March, and the fourth model will join them in the fall. Then the production of these cars will start in the Kaliningrad region. Whether SsangYong will be able to gain a foothold in our market once again and whether other companies from South Korea will follow it, "Izvestia" found out.

Now Korea, soon Kaliningrad

South Korean automaker SsangYong has returned to Russia under the KGM brand. As Vitaly Osipov, General Director of "Rex Motors", KGM distributor, stated at the presentation of the new brand, sales of three crossovers will start in Russia in early March: Tivoli, Korando and Torres. In the fall, the Rexton frame SUV will appear in dealers' showrooms. Osipov emphasized that the cars are already in Russian warehouses.

- There is no question of any parallel import. The cars are supplied officially, they have received OTCs, there will be a branded warranty - five years or 100 thousand kilometers. These are cars assembled in Korea, using Japanese and European units and assemblies. We are entering the Russian market not to try, but to be on it, - emphasized Vitaly Osipov.

He also said that in the fall it is planned to start assembling KGM cars at the Avtotor plant in the Kaliningrad region. However, the general director of "Rex Motors" did not disclose details, promising that "more detailed news will appear in the next couple of months".

What they came with

The KGM Tivoli compact crossover was first introduced in 2015 under the SsangYong brand and has already gone through three restyling. The front-wheel drive car is powered by a 1.5-liter turbo engine with 163 hp combined with a six-speed Aisin automatic transmission. This model will cost in our country from 3.59 million rubles.

The larger KGM Korando crossover will be available to Russians with both front-wheel drive and all-wheel drive. It is also equipped with a 1.5-liter gasoline turbo engine, which produces 163 hp and works in tandem with a six-band "automatic" Aisin. Such a car will be presented in three configurations, the cost of the base version will be 4.39 million rubles.

The same powertrain (163-horsepower turbo engine with a volume of 1.5 liters, six-speed automatic) will be received by a mid-size crossover KGM Torres. It will be presented both with front-wheel drive and all-wheel drive transmission. Dealers will ask a minimum of 5.15 million rubles for this model.

Frame all-wheel drive SUV Rexton, which will appear in the fall, will receive a gasoline two-liter turbo engine with an output of 225 hp, automatic six-speed transmission and will be equipped with a reduction gear. This car will cost a minimum of 6.79 million rubles.

- All cars will be in European specification, some additional adaptation for Russia they have not undergone. While the cars will be with gasoline engines, we do not plan to introduce diesel modifications, as well as electric versions of these models, - said at the presentation, the director of sales and network development "Rex Motors" Dmitry Serbulov.

At the start of sales KGM dealer network will be represented by 40 showrooms, by the end of the year their number is planned to reach 70, said the company representatives. This year, according to Vitaly Osipov, it is planned to sell 20 thousand KGM cars, and the "locomotive" will be the Torres model, which is expected to account for about 60% of demand, and the second most popular model will be Rexton with a share of 25%.

Remember the old

SsangYong brand, which has now changed its name to KGM, is quite familiar to Russians. Almost 20 years ago, at the end of 2005, the assembly of SsangYong SUVs was established in Naberezhnye Chelny, and in 2009 their production was moved to the Far East. The best year in terms of sales for the Korean company was 2013, when these Korean models sold 34 thousand units. Then Russia became the largest market for SsangYong. However, already in 2014, sales fell by a quarter due to price increases.

In December 2014, deliveries of cars and components to our country were stopped, and in March 2015, production was suspended at the Far East enterprise, which caused the company to make a loss of $29.2 million. Further, dealers sold off cars from warehouses. At the end of 2016, the SsangYong brand tried to return, but the Tivoli and Actyon crossovers were not in demand. In 2017, a small batch of cars was delivered, which dealers sold until the beginning of 2019.

Since 2022, SsangYong models have been imported into Russia through alternative routes, with 108 cars sold the year before last, according to Avtostat-Info, and only 79 last year.

Big ambitions

KGM's plans are quite ambitious, but taking into account the cost of the presented cars are doubtful, says Igor Vladimirsky, editor-in-chief of Avtorevu. In his opinion, at best, they may be realized half or even only a quarter by the end of the year.

- The cars are not cheap, so it will be quite difficult to sell the planned 20 thousand units during the year," he believes.

Igor Morzharetto, a partner of the analytical agency Avtostat, also believes that it will be extremely difficult to achieve the sales figures announced at the presentation.

- SsangYong brand is known to Russians, the presented models are quite interesting in their characteristics. But everything rests on the price: it turns out that these cars will cost about one and a half times more expensive than their Chinese counterparts. Therefore, we cannot count on serious sales volumes," he told Izvestia.

The first to go?

SsangYong, albeit under a new name, became the first Korean automaker that decided to return to our country after the mass exit of automobile brands in 2022. Recently, Mikhail Bakhtiarov, co-founder of Major Auto dealership holding Mikhail Bakhtiarov, announced about the possible return of "Koreans" to the Russian market. He predicts that it may happen at the junction of 2025-26 years.

To confirm these forecasts, last week the South Korean media published publications that Hyundai Motor Concern is considering the option of buying back the plant in St. Petersburg and will make a decision on it by the end of 2025. This is indirectly confirmed by the re-registration of Hyundai's trademark in Rospatent in August last year

KGM brand's entry into the Russian market does not mean that other Korean automakers will immediately decide to return to Russia after it, says the head of Avtorevu. According to him, for this to happen, at least, a change in the geopolitical situation is necessary. Given the recent events, the probability of such a scenario is not excluded, he believes. However, even if Korean automakers come back after some time, they are unlikely to win back their former positions in the Russian car market, Igor Vladimirskiy is sure.

- Over the last three years, Chinese car brands have densely settled in our country. They will not give up their market share without a fight," he told Izvestia.

Igor Morzharetto also doubts in the soon mass return of "Koreans" to the Russian market. According to him, it may take a long time from the discussion of such a possibility to the actual appearance of this or that South Korean car brand. At the same time, even theoretically, it will make sense for them only when organizing full-fledged production at Russian car plants, the expert believes.

- When importing cars, due to customs duties, excise duties, taxes and annually indexed scrappage, their cost will be very high. In this case, there will simply be no economic incentives even for the theoretical return of Korean car brands to our country.