S&P puts Hyundai, Kia on positive watch

Standard & Poor's said it placed its BB+ corporate credit and BB+ senior unsecured debt ratings on Hyundai Motor Co. and Kia Motors Corp. on CreditWatch with positive implications.

The CreditWatch placements follow improving competitiveness of the Hyundai group in their key overseas markets. Both Hyundai and Kia have continued to show market share improvements in the North American, European and Chinese markets, offsetting weak sales in the Korean domestic market.

"Despite the group's aggressive expansion strategy, both Hyundai and Kia continue to show improving global market positions through enhanced product quality and brand image with the launch of new models, thus reducing our concerns regarding the investment risks associated with both companies' expansion plans," said S&P credit analyst Eun Jin Kim.

"However, with over 70% of export sales, the group has substantial exposure to foreign currency fluctuations. The recent strong won and higher steel costs have led to pressures on earnings for both companies."

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