Ssangyong to Look to U.S., China as Brexit Hits U.K. Exports
(Bloomberg) -- South Korean automaker Ssangyong Motor Co. will look to markets such as the U.S. and China to make up for an expected decline in shipments to the U.K. following the Brexit referendum.
The currency fluctuations in the wake of Britain’s decision to leave the European Union has hit Ssangyong’s exports to the U.K., Vasudev Tumbe, chief financial officer for the automaker, said in an interview in Seoul, without giving details. The Korean won has gained more than 16 percent against the pound since the June 23 vote, making exports from the Asian country more expensive while reducing repatriated profits.
The headwinds from Europe pose risks to Ssangyong Motor’s turnaround. The carmaker is expected by analysts to post its first annual profit this year since India’s Mahindra & Mahindra Ltd. acquired a majority stake in 2011. Deliveries have risen 7 percent this year through June, outpacing gains of about 2 percent at its bigger Korean rivals, Hyundai Motor Co. and Kia Motors Corp.
The U.K. accounted for 8.3 percent of Ssangyong Motor’s total sales this year through early July, according to spokesman Choi Jin Woong. The company doesn’t export to the U.S. and sells relatively few imported vehicles in China, Choi said.
Ssangyong Motor is considering setting up a factory in China, according to Tumbe, adding it’s too early to announce the plan. Most major carmakers including Hyundai Motor and Kia Motors have plants in China, enabling them to avoid paying hefty levies on imported vehicles.
Shares in Ssangyong Motor have declined 5.4 percent this year, the company outperforming Hyundai Motor’s 11 percent drop and the 20 percent slump in Kia. The benchmark Kospi index has gained 4.5 percent in the same period.