Moody's Reviews Downgrade of Hyundai and Kia Motors' Credit Ratings

[Asia Economy Reporter Dongwoo Lee] The international credit rating agency Moody's announced on the 26th that it has placed Hyundai Motor and Kia Motors under review for a potential downgrade of their credit ratings.

Moody's stated, "New car demand is expected to weaken significantly over the coming months," adding, "This demand slowdown is expected to be particularly pronounced in the Europe, Middle East, and Africa (EMEA) and North American markets."

It further explained, "The rapid spread of the novel coronavirus disease (COVID-19) in the U.S. and EMEA regions could prolong the suspension of Hyundai and Kia's production facilities and significantly delay the recovery of vehicle sales."

Additionally, Moody's noted, "The automotive industry, which heavily depends on consumer demand and sentiment, is one of the sectors most affected by the shock caused by the spread of COVID-19."

Moody's currently assigns a long-term corporate credit rating of 'Baa1' to both Hyundai Motor and Kia Motors. The agency has also placed the credit ratings of three Chinese automakers?Dongfeng, Beijing, and Geely?under review for potential downgrades.