Moody`s revises up credit ratings of two S. Korean automakers

By Kim Young-gyo
HONG KONG, Sept. 21 (Yonhap) -- Global credit appraiser Moody's Investors Service
said Tuesday it has upgraded its credit ratings for South Korea's two leading
automakers, boosted by strong sales this year.
Moody's lifted the rating of Hyundai Motor Co., South Korea's No. 1 automaker,
from Baa3 to Baa2, while notching up Kia Motors Corp.'s rating from Ba1 to Baa3.
The credit outlook for both companies was stable.
The upgrade of the ratings, with Hyundai Motor ranking ninth-highest on the
agency's 20-grade rating scale and Kia Motors at the 12-highest level, came as
the South Korean automakers have been expanding their market shares in the U.S.
and China.
"The rating actions reflect our expectation that Hyundai's financial profile will
significantly improve in 2010 and remain robust over the medium term, underpinned
by its continued market share growth globally and Kia Motors Corp.'s rapid
turnaround," said Chris Park, vice president for the credit rating agency.
The sales performance of Hyundai and Kia have been strong so far this year due to
growth in their market share and a recovery in their key markets, Moody's said,
remaining optimistic on the two companies' future performances.
"Despite an expected slowdown in demand in the major markets in the second half
of 2010, Moody's anticipates that the group's unit sales will grow in the low
teens in 2010. It should also benefit from the ongoing recovery in global auto
demand over the medium term," the credit appraiser said in a statement.
"Its robust sales performance since the onset of the financial crisis
demonstrates the group's resilience during a downturn, driven by its high level
of geographical diversification, and its strengths in the compact sedan segment."
ygkim@yna.co.kr
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