SEOUL — Moody's Investors Service has elevated the credit ratings of Hyundai Motor Co., Kia Corp., and Hyundai Mobis Co. to "A3" from "Baa1", reflecting the enhanced competitive standing of these companies, Hyundai Motor Group announced on Tuesday. This upgrade marks the first instance of the trio achieving an "A" level rating from the global rating agency.
According to Yonhap News Agency, Moody's has also revised the outlooks for these companies from "stable" to "positive", indicating the potential for further upgrades. The "A3" rating places these Hyundai affiliates among the elite group of eight global automotive companies with an "A" rating, a list that includes industry giants such as BMW, Mercedes-Benz, and Toyota.
Moody's justified the upgrade by citing the companies' dominant position in the South Korean market, their competitive edge in crucial international markets, a high level of geographic diversification, minimal financial leverage, a robust balance sheet, and synergies arising from their integrated operations. Wan Hee Yoo, Moody's Vice President and Senior Credit Officer, noted that the stable outlook is based on expectations of sustained profitability and a substantial financial cushion for Hyundai Motor and Kia, despite challenges in the global automotive sector.
The agency forecasts that the adjusted EBITA margins for Hyundai Motor and Kia will remain strong at about 10-11 percent through the next year, aligning with those of other A-rated global automakers.