Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Hyundai Motor, Kia earn top ratings from global top agencies
Hyundai Motor and Kia headquarters in Seoul / Courtesy of Hyundai Motor Group
By Lee Min-hyung
Hyundai Motor and Kia have received A ratings from the world’s top three ratings agencies on their healthy financial management and flexible vehicle production capability, the carmakers said Monday.
After S&P Global Ratings upgraded their credit ratings from BBB+ to A-, the two carmakers have joined an elite group of carmakers with a triple-A rating from S&P, Moody’s and Fitch Ratings. Only four other global carmakers — Mercedes-Benz, BMW, Toyota and Honda — have achieved this distinction.
This was made possible by the Korean carmakers’ decent operating profit ratio driven by its robust sales across both hybrids and electric vehicles (EV).
The two affiliates from Hyundai Motor Group achieved a combined operating profit-to-sales ratio of 10.7 percent in the first half of 2024, the largest among global carmakers.
The solid earnings growth was fueled by their improved product mix and increasing global market share. Hyundai Motor Group is one of a few global carmakers capable of flexibly adapting to any changes in market demand. The carmakers have decided to place a strategic shift on hybrids after the global EV industry entered an early phase of chasm this year before their expected mass adoption.
The latest outcome also allowed the carmakers to surpass their rivals in terms of credit ratings. General Motors, Ford and Stellantis won B ratings from the three ratings agencies, while Volkswagen also received a BBB+ rating from S&P.
“The high worldwide evaluations reflect our product and brand competitiveness, profitability, financial soundness and global market position,” a Hyundai Motor official said.
“The agencies forecasted our balanced portfolio, including both EV and hybrid models, to enable us to adapt to market changes during the electrification transition period. Hyundai Motor will keep garnering efforts to maintain financial soundness and strengthen global competitiveness by responding flexibly to market changes.”