Moody's Followed by Fitch Upgrades Hyundai Motor and Kia Credit Ratings to A-

S&P Also Expected to Upgrade to A Rating
"Profitability and Market Position Expected to Be Maintained"

Hyundai Motor Company and Kia have received an 'A-' credit rating for the first time from Fitch, one of the world's top three credit rating agencies. This upgrade reflects the improved profitability and cash generation capabilities based on their diversified markets and product lines.

On the 16th, Hyundai Motor Group announced that Fitch had upgraded Hyundai Motor Company and Kia's credit rating from 'BBB+' to 'A-'. The credit rating outlook was presented as 'stable'. This is the first time Hyundai Motor Company and Kia have received an 'A' rating from Fitch. Following Moody's, another of the top three credit rating agencies, which raised their rating to A3 on the 6th, they have consecutively achieved an A rating.

The 'A-' rating corresponds to the 7th highest out of 20 grades in Fitch's credit rating system. It indicates a sound credit status with significantly low credit risk. Only seven global automotive companies, including Toyota and Mercedes-Benz, have received an A rating from Fitch, with Hyundai Motor Company and Kia among them.

Fitch explained, "The decision to upgrade the credit rating reflects Hyundai Motor Company and Kia's integrated brand competitiveness and their continuously improving market position in key global markets," adding, "We considered their diversified market and product portfolio, improved profitability and cash generation, and substantial financial buffer."

Specifically, Fitch cited improvements in Hyundai Motor Company and Kia's product lineup centered on high value-added vehicles such as sport utility vehicles (SUVs), strengthened market share and brand competitiveness in key markets, and a solid market position in the electric vehicle markets of the United States and Europe.

The outlook was also positive. Despite a slowdown in the growth of automotive market demand, intensified price competition, and a market environment with a strong Korean won, Hyundai Motor Company and Kia's profitability and market position are expected to be maintained. Fitch stated, "Last year, Hyundai Motor Company and Kia recorded solid sales and profit growth thanks to continuous product mix improvements, flexible pricing policies, and a weaker Korean won," and forecasted, "This year, the combined operating profit (EBIT) margin of Hyundai Motor Company and Kia will exceed the recent 3-4 year average and maintain above 9% in the medium term."

Even in the electric vehicle market, which is expected to experience somewhat slower growth, they are anticipated to navigate smoothly. Fitch explained, "Hyundai Motor Company and Kia will flexibly respond to changing market conditions by reviewing their mid- to long-term electrification goals and investment plans."

The last of the top three credit rating agencies, Standard & Poor's (S&P), also shows signs of upgrading Hyundai Motor Company and Kia's current 'BBB+' credit rating. Last month, they already raised the credit rating outlook from 'stable' to 'positive', signaling a forthcoming upgrade.

An upgrade in credit rating not only increases external credibility but also reduces financing costs. A Hyundai Motor Group official said, "Based on the enhanced external credibility, we will continue to strive to maintain financial soundness and further strengthen our global competitiveness."