Hyundai Motor Company and Kia Receive 'All A' Ratings from the World's Top 3 Credit Rating Agencies

Recognized This Year by Moody's, Fitch, and S&P
Japan's Toyota and Honda, Germany's Benz Side by Side

Hyundai Motor Company and Kia have both received A ratings from the world's three major credit rating agencies.

The only automakers to receive A ratings from all three agencies are Japan's Toyota and Honda, Germany's Mercedes-Benz, and South Korea's Hyundai Motor Company and Kia. For Hyundai Motor Company and Kia, this recognition solidifies their position as the world's third-largest automaker by sales volume and acknowledges them as top-tier global vehicle manufacturers in terms of financial soundness and future business prospects.

Earlier this year in February, after receiving A ratings from Moody's and Fitch, Hyundai Motor Company and Kia were upgraded to A- (stable) by Standard & Poor's (S&P) within six months. The movements of these three major credit rating agencies are said to have a powerful influence on the global financial market, affecting tens of trillions of won in funds in a single day.

Although Germany's Volkswagen produces more vehicles annually than Hyundai Motor Company and Kia, its S&P credit rating is BBB+, which is one notch lower. The three major U.S. automakers?General Motors (GM), Ford, and Stellantis?all received B ratings. Hyundai Motor Company and Kia explained, "Various financial indicators, including double-digit operating profit margins, and flexible production capabilities that accommodate both electric and hybrid vehicles, have been highly evaluated by credit rating agencies."

Kim Chang-hwan, Executive Vice President of Hyundai Motor Company (second from the left), Pat Wilson, Commissioner of the Georgia Department of Economic Development, and Jang Jae-hoon, President of Hyundai Motor Company, are announcing plans for hydrogen-related cooperation at the CES 2024 exhibition held in the United States earlier this year.
[Photo by Yonhap News]

The combined EBITDA margin of Hyundai Motor Company and Kia exceeded 10%, indicating excellent cash-generating ability. Their plan to pursue an initial public offering (IPO) worth $3 billion (approximately 4 trillion won) in India was also highly regarded from a liquidity perspective. While Tesla produces only electric vehicles and Toyota focuses on hybrids, Hyundai Motor Company and Kia can flexibly respond to market conditions with both types of vehicles. From January to July this year, their market share of electric vehicles in the U.S. was 10%, ranking second after Tesla.

The credit rating upgrade of Hyundai Motor Company and Kia aligns with the government's value-up program, as an increase in credit rating means the corporate value has risen accordingly. Hyundai Motor Company plans to hold a CEO Investor Day on the 29th to announce key management strategies and financial soundness goals.

This content was produced with the assistance of AI translation services.