Global rating agency Moody's Investors Service said Monday political tensions between South Korea and China over the deployment of an advanced US missile shield system could have some negative impact on the automotive sector here, though it expected the impact to be manageable.
Moody's didn't expect the diplomatic rows with China to cause any immediate change in the ratings of three Moody's-rated auto industry companies -- Hyundai Motor Co., Kia Motors Corp. and Hyundai Mobis Co. -- given their significant balance sheet strength.
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(Yonhap) |
"But, a significant strengthening of the Korean won, weaker-than-expected industry fundamentals and potential military conflict with North Korea pose downside risks to credit quality," Moody's said in a report.
Seoul and Beijing have been at odds over the deployment of the THAAD battery in South Korea. Beijing has opposed the THAAD installation, arguing it could be used against it, though Seoul has insisted it is purely aimed at countering missile threats from North Korea.
Such political tensions resulted in China's ban on the sale of group tours to South Korea and boycott campaigns against South Korean products in China.
As a result, Hyundai Motor and Kia Motors have struggled with sharp declines in vehicle sales in the world's biggest automobile market this year.
In the January-August period, Hyundai sold 404,300 vehicles in China, down 40 percent from 674,810 units a year earlier. Kia Motors also saw its sales there plung 53 percent to 172,674 from 368,686 over the cited period. (Yonhap)
