Hyundai, Kia get top A ratings from big 3 credit rating agencies

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Hyundai, Kia get top A ratings from big 3 credit rating agencies

Published: 26 Aug. 2024, 16:25

SARAH CHEA
chea.sarah@joongang.co.kr

A Kia employee produces vehicles at its plant in Georgia. [KIA]

Hyundai Motor and Kia earned A ratings from the top three global credit rating agencies thanks to stable profitability and flexible production systems, together becoming one of world's only four automakers to achieve the feat.

It comes after the Korean carmakers received an A- rating from S&P Global last week, six months after Fitch Ratings and Moody's Ratings upgraded theirs to an A3 and A-.

Hyundai and Kia became the world's fourth carmaker to grab A ratings from all three agencies after Mercedes-Benz, Toyota and Honda. The two Korean companies are separate brands under Hyundai Motor Group, but global credit firms categorize them as one brand.

Volkswagen has a larger production capacity but has a BBB+ rating from S&P Global. General Motors, Ford and Stellantis all have B ratings from the credit companies.

"Hyundai's relatively stable profitability, backed by the popularity of high-margin vehicles and growing presence in the U.S. market was highly recognized in the upgrade," said Pak Jeong-min, senior director at Fitch Ratings, during a recent interview with the Korea JoongAng Daily.

"Hyundai’s share in the U.S. EV market did not drop even after the rollout of the Inflation Reduction Act, thanks to its well-targeted expansion of lease programs.”

Hyundai and Kia claimed 10 percent of the U.S. EV market this year through July, beating Ford and General Motors, according to data from Motor Intelligence. It narrowed the gap with Tesla, whose share dropped to 50 percent from 70 percent in the previous year.

Hyundai is also ramping up its flexibility in EV production in response to slowing EV sales in the global market. Its $5.5 billion EV facility in Georgia, which is slated to start operations in October, is expected to be upgraded to simultaneously produce hybrid vehicles.

BY SARAH CHEA [chea.sarah@joongang.co.kr]