Brexit to affect Samsung and LG business (Update: Acer too)
Update: DigiTimes is reporting that Acer, too, is expecting its operations to be affected by Brexit. The company’s CEO, Jason Chen, said that the recent UK vote in favor of leaving the EU will result in weaker demand in the European market, mostly due to “weakened consumer confidence and exchange rate fluctuations. However, how serious the impact may be remains to be seen”, he said.
UK decided to exit the European Union after 51.9% of voters were in favor of Brexit. However, at least two years will pass until the UK will exit the EU de facto and de jure, a period which will be governed by negotiations, procedures, protocols, etc.
Still, the Korea Herald reports that Brexit will affect Samsung’s and LG’s electronics business. Despite the fact that the two Korean giants don’t have production facilities in the UK (Samsung has plants in Poland, Slovakia and Hungary, while LG in Poland), sales in Europe have been steadily declining over the past three years, and Brexit is expected to further contribute to the decline. After leaving the EU, sales and import taxes on products produced in the EU might increase prices for electronics.
Additionally, the Great Britain Pound has started losing ground compared to other currencies, which will further add to an increase in prices for products and services.
The Korea Herald also reports that Samsung might consider relocating its European headquarters in London to a different location in Europe.
Source: The Korea Herald