Back in 2014, South Korean automaker Ssangyong said that it was planning to bring its lineup of cars and crossovers to the U.S. in 2016. Those plans never panned out, but thanks to the U.K.'s decision to bail on the European Union, Ssangyong's U.S. debut is up for discussion again.
Wondering how Brexit can have an effect on auto sales today, months if not years before the U.K./E.U. divorce papers have been signed? It comes down to currency and more than a little uncertainty.
The British pound has floundered in the wake of the Brexit vote. For foreign automakers doing business in the U.K., that's resulted in a drop in sales revenue since June 23.
The South Korean won, for example, has risen 16 percent against the pound. A few months ago, a £10,000 car would've earned Ssangyong over $17 million won. Today, that same car generates less than $15 million won. Companies like Ssangyong could raise prices to compensate, but few have chosen to do so out of fear of losing sales.
The problem is particularly pronounced for Ssangyong, which generates 8.3 percent of its global sales in the U.K. Sustaining huge financial hits due to currency fluctuations isn't terribly attractive, and the situation could get far worse, given the uncertainty surrounding the U.K.'s departure from the E.U.
And so, Ssangyong has turned its attention to strong, relatively stable markets like the U.S. and China.
Breaking into the American market won't be easy. Ssangyong has no presence at all here, and its parent company--India's Mahindra--has become something of a persona non grata among U.S. dealers in recent years after failing to deliver on promises of a new vehicle line. Then there's the company name, which doesn't exactly roll off the tongue to most English speakers.
In short, Ssangyong is a small company with few resources, little/no brand recognition among U.S. consumers, and no dealer network. The company hasn't given an updated timeline for its American debut, and we wouldn't hazard a guess as to when it might happen. When it does, though, it'll be interesting to watch.