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Hyundai Motor's Genesis GV70 (Hyundai Motor) |
Moody's Investors Service has upgraded the credit ratings of Hyundai Motor, Kia and Hyundai Mobis to "A3" from "Baa1" on their improved competitiveness, their parent company said Tuesday.
It marks the first time the three companies have received A ratings from the global credit appraiser, according to Hyundai Motor Group.
Moody's also changed their outlooks from "stable" to "positive," heralding a possible ratings upgrade down the road.
"A3" is the seventh-highest on the appraiser's 21 rating scale. The affiliates of Hyundai Group are among the eight automobile companies in the world with an A rating, along with Germany's BMW and Mercedes-Benz, and Japan's Toyota.
The credit appraiser said Hyundai Motor and Kia's A3 ratings reflect their strong position in the Korean automotive market, competitive position in key overseas markets, high degree of geographic diversification, very low financial leverage and strong balance sheet, as well as their synergies deriving from a high degree of integration in many areas.
"The stable outlook reflects our expectation that Hyundai Motor's and Kia's profitability will remain robust, and their substantial financial buffer will stay largely intact over the next 1-2 years, notwithstanding the increasing difficulties in the global automotive industry," Wan Hee Yoo, a Moody's vice president and senior credit officer, said.
Moody's forecast Hyundai Motor and Kia's adjusted EBITA margins to remain robust at around 10-11 percent until next year, similar to those of other A-rated global carmakers.
