Kia the latest automaker to mull exiting Russia

Kia sees volatility rising in Russia with the prolonged war in Ukraine, and in a worst-case scenario, may shutter its business entirely, an executive said Tuesday.

"If you ask me one negative factor for sales, I would say volatility in Russia may accelerate next year and the automobile market itself may completely shut down for a while," Woo-Jeong Joo, Kia's executive vice president, said during an earnings call. "We may consider doing an after-service business only, because we basically can't supply cars there."

Kia's sales in Russia plunged almost 65 percent this year through September with about 57,000 cars delivered in the nation versus a 4.1 percent decline in sales globally.

Kia makes cars in Russia at a plant in St. Petersburg run by affiliate Hyundai Motor. The facility has an annual capacity of 200,000 cars and employs some 2,200 workers, according to Hyundai's website.

Kia on Tuesday reported operating profit for the third quarter that missed average analyst estimates.

The automaker would join a long list of companies also winding down their exposure in Russia after its invasion of Ukraine in late February.

Volkswagen Group is looking for an investor to take over its factory in Kaluga, where production was halted soon after the Ukraine war began.

Toyota Motor has said it will cease vehicle manufacturing in the country.

Mazda Motor is considering a permanent exit, the Japanese firm said.

Nissan said it will hand over its business in Russia to a state-owned entity for 1 euro ($0.97), taking a loss of about 100 billion yen ($687 million).

Renault decided to sell its majority stake in AvtoVAZ to a Russian science institute. The deal, however, includes a six-year option to buy back the stake.

Kia was the No. 2-selling brand in Russia last year with its models commanding a share of 12.3 percent, trailing local rival AvtoVAZ at a share of 21 percent, according to figures from the Moscow-based AEB. Hyundai ranked third with an 10 percent share.

Last year Kia had four cars in the country's ranking of top 25-sellers, led by the Rio with a volume of 82,941, AEB numbers show.

Joo also said that supply-chain disruptions in Russia and in China are expected to continue in the fourth quarter. He declined to comment when asked if Hyundai was planning to selli its plant in Russia.

Kia's 2021 sales in the nation accounted for around 6 percent of its total, according to Samsung Securities.