Firm making car that Putin gifted to Kim uses South Korean parts, data shows

[June 28, 2024]  By Gleb Stolyarov

TBILISI (Reuters) - Laughing and joking, Russian President Vladimir Putin and North Korean leader Kim Jong-un cruised around Pyongyang last week in a Russian-made Aurus limousine to showcase their strengthened anti-Western alliance.

The luxury sedan was intended to epitomize Russia's domestic prowess and reduced dependence on imported technology and goods when unveiled in 2018.

But customs records show that the company that builds it uses millions of dollars in imported parts, many arriving in Russia from what Kim has described as his country's "primary foe", South Korea.

The imports point to Russia's ongoing reliance on Western technology as it seeks to navigate Western attempts to cut it off from global supply chains as punishment for its invasion of Ukraine.

The two leaders took turns driving the armored limousine during Putin's pomp-filled visit, his first in nearly a quarter of a century to North Korea, in a demonstration of the two nuclear powers' increasingly close ties.

Russia imported equipment and components worth at least $34 million between 2018 and 2023 for assembling Aurus cars and motorcycles, customs records seen by Reuters showed. Reuters does not have access to more recent data.

The imports included car body parts, sensors, programmable controllers, switches, welding equipment and other components worth almost $15.5 million imported from South Korea. Parts were also imported from China, India, Turkey, Italy and other EU countries.

Foreign supplies for Aurus kept coming after Russia's full-scale invasion of Ukraine, with goods worth almost $16 million, including $5 million produced in South Korea, imported since February 2022, the records showed.

Reuters could not determine specifically which imported foreign parts ended up in the car gifted to Kim, and the imports were not in breach of sanctions - Aurus LLC was sanctioned by the United States in February, 2024.

The Aurus sedan was developed by Russian state-owned research institute NAMI in partnership with Russian carmaker Sollers, which has since sold its stake.

Aurus Motors and its CEO Andrey Pankov did not respond to Reuters' requests for comment on the use of foreign parts, including from South Korea, in its vehicles.

GROWING PRODUCTION

The company launched official production in Russia's Tatarstan region, around 1,000 km (620 miles) from Moscow, in 2021 - before then it was made on a small, experimental scale at NAMI. It will start additional production in St Petersburg later this year at Toyota's former factory.

Russia's President Vladimir Putin and North Korea's leader Kim Jong Un ride an Aurus car in Pyongyang, North Korea in this image released by the Korean Central News Agency June 20, 2024. KCNA via REUTERS/File Photo

Toyota is one of many foreign carmakers to exit the Russian market since the invasion, which Russia calls a "special military operation".

The exodus has left a gap that Chinese producers have been quick to fill, rapidly seizing more than half the market share and exposing Russia's limited domestic production capacity.

South Korean firms were among the largest suppliers to Aurus, including industrial equipment producer Kyungki Industrial Co, car body parts manufacturer BYT CO LTD and batteries supplier Enertech International Inc.

Italian plastic parts producer Industrie Ilpea Spa and Hong Kong company Rain Electronics also supplied goods.

An official at Kyungki Industrial Co confirmed that the company has supplied parts to Aurus LLC and continues to do so. The company is not concerned about any potential sanctions, the official said, declining to give further details.

Rain Electronics could not be reached for comment. When a Reuters correspondent visited the address listed on the internet as the company's office in Hong Kong, there was no trace of Rain Electronics on the floor listed online or in the office building.

BYT CO LTD, Enertech International and Industrie Ilpea Spa did not respond to Reuters' requests for comment.

The Aurus Senat, retro-styled after the Soviet-era ZIL limousine, is Russia's official presidential car and was used by Putin at his presidential inaugurations in 2018 and 2024.

Putin has now given Kim, believed to be a keen automobile fan, two Aurus cars, first during Kim's visit to Russia in February, and a slightly different model in North Korea in June.

Prices for Aurus cars - there are four models including an SUV and armored version - start from 46.625 million roubles ($528,356). Customers include Turkmenistan President Serdar Berdymukhamedov.

Aurus sold 107 cars in Russia in 2023, according to data from Russian analytical agency Autostat. Aurus does not disclose production numbers.

($1 = 88.2455 roubles)

(Reporting by Gleb Stolyarov; additional reporting by Marcus Lum in Hong Kong, Joyce Lee and Heekyong Yang in Seoul, Giulio Piovaccari in Milan; Writing by Alexander Marrow; Editing by Mike Collett-White and Philippa Fletcher)

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