Hyundai Motors and Kia Motors, Credit Rating A Triple Crown… Global Mobility Industry Status↑

Global credit rating rises, securing future investment resources is advantageous… Mid- to long-term investment acceleration expected
Major foreign news outlets highlight the changed status in the mobility industry due to achieving all A credit ratings

Hyundai Motor Company Yangjae-dong office building / Courtesy of Hyundai Motor Company

When Hyundai Motor Company and Kia Motors achieved the “triple crown” by receiving credit ratings of A from all three major global credit rating agencies, major overseas media outlets covered the news, detailing Hyundai Motor Company and Kia Motors’ increased status and competitiveness in the global mobility industry, as well as the basis for the credit rating upgrade. Following their rise to become one of the “global top three automakers” along with Toyota and Volkswagen, the financial market is also paying attention to the fact that their investment value and stability have risen to the top level in the industry.

Hyundai Motor Company and Kia Motors announced on the 29th that they plan to further solidify their elevated status by accelerating the promotion of future businesses based on their A “triple crown” credit rating.

The upgrade of the credit rating to Grade A will enhance the company’s status and brand value in the global financial market, which will strengthen the trust of stakeholders such as shareholders and investors, and will also be advantageous in securing funds for investment in future businesses.

Hyundai Motor Company and Kia Motors officials said, “In line with our elevated status in the global automobile market and financial market, we will engage in more active and transparent communication domestically and internationally, and further elevate our status through the smooth execution of our mid- to long-term future strategies.”

Foreign media draws attention to the increased status in the global mobility industry with the ‘Triple Crown’

Overseas media reported the news that Hyundai Motor Company and Kia Motors had received an all-A rating from the world’s three major credit rating agencies, including Standard & Poor’s (S&P), and said, “This is a meaningful milestone (achievement) for the Korean automobile brand and signifies that Hyundai Motor Company and Kia Motors’ influence in the global mobility industry is increasing,” and “Hyundai Motor Company and Kia Motors have solidified their position as leaders in the global mobility industry.”

S&P also explained in detail the basis for upgrading the credit ratings, saying, “Hyundai Motor Company and Kia Motors’ credit ratings were upgraded due to their significantly improved profitability over the three years starting in 2021, driven by increased market share, improved product mix, and favorable exchange rates in some cases.” S&P also added, “The company’s balanced portfolio, which includes electric and hybrid models, will allow it to respond to market changes during the transition to electrification.”

The US Associated Press and the Wall Street Journal Internet, the UK Financial Times (FT) Internet, the US financial media outlets Benzinga and Yahoo Finance, the Singapore daily newspaper AsiaOne Internet, the Australian daily newspaper Canberra Times Internet, the German economic and financial portal Financier, and the US automobile media outlet Autoblog reported the news of Hyundai Motor Company and Kia Motors’ credit rating triple crown.

Hyundai, Kia, and Genesis vehicles driving through the HMG Driving Experience Center./Courtesy of Hyundai Motor Company

With global credit rating agencies upgrading their credit ratings, Hyundai Motor Company and Kia Motors are expected to accelerate their push for future businesses such as electrification, SDV (software-centric vehicle), AAM (future air mobility), and robotics.

In relation to future new businesses, Hyundai Motor Company and Kia Motors announced large-scale investment plans through the 2024 CEO Investor Day. At the CEO Investor Day held on the 28th, Hyundai Motor Company announced a large-scale investment plan of a total of KRW 120.5 trillion over 10 years from this year to 2033 and a mid- to long-term strategy. This investment plan is an increase of approximately 10% compared to the KRW 109.4 trillion for 10 years (2023-2032) announced last year, and will be used to execute the mid- to long-term core strategy ‘Hyundai Way’, including next-generation hybrids, EREVs, EVs, SDVs, and hydrogen.

Kia also announced at its CEO Investor Day held in April that it would invest a total of 38 trillion won by 2028. This is an increase of 5 trillion won compared to the previous five-year investment plan (2023-2027), of which 15 trillion won will be spent on future businesses such as electrification, PBV, SDV, AAM, and robotics.

The credit rating upgrade of Hyundai Motor and Kia is expected to contribute to attracting new shareholders and investors in the process of securing investment funds for future new businesses, as well as raising funds at low interest rates when necessary. In addition, while promoting future mobility businesses such as AAM, robotics, and artificial intelligence (AI), we can also expect strategic partnerships with global leading companies in various industries such as IT, electronics, and aviation.

This is because an increase in status in the financial market can lead to ▲ increased trust from shareholders and investors ▲ enhanced corporate status and brand value ▲ improved transaction conditions when promoting business ▲ increased funds available in the financial market and lower financing interest rates, which can be advantageous for promoting new businesses in the future.

In addition, experts predict that Hyundai Motor Company and Kia Motors’ achievement of the Triple Crown will not only be a corporate achievement, but will also have a positive impact on the Korean automobile industry and the national economy.

Hyundai Motor Company and Kia Motors’ excellent credit ratings contribute to raising the external credibility of their business partners in parts, raw materials, and automobile financing, while their active investment execution helps create domestic jobs and revitalize the economy.

An industry insider said, “Following securing a spot in the top 3 in global sales, receiving an all-A rating from the world’s top three credit rating agencies is expected to be a turning point that will elevate the global status of Hyundai Motor Company, Kia Motors, and the Korean automobile industry as a whole.”

There are only four Triple Crown automakers in the world.

Hyundai Motor Company and Kia Motors re-obtained an ‘A-‘ rating from the global credit rating agency S&P on the 21st for the first time in six years. Following the upward adjustments by Moody’s and Fitch in February of this year, both companies achieved the feat of receiving an A rating from the top three global credit rating agencies for the first time since their establishment.

Hyundai Motor Company and Kia Motors received an S&P ‘A-‘ rating, which is the 7th out of 22 ratings, a Moody’s ‘A3’ rating, which is the 7th out of 21 ratings, and a Fitch ‘A-‘ rating, which is the 7th out of 23 ratings. All of these ratings indicate good credit status and a very low level of credit risk.

Hyundai and Kia’s credit rating ‘triple crown’ is an achievement that surpassed not only the big three American automakers, GM, Stellantis, and Ford, but also Volkswagen, the world’s second-largest sales company. In addition, there are only four automakers that have received all A grades from the three major global credit rating agencies, including Hyundai and Kia, Benz, Toyota, and Honda.