(The following statement was released by the rating agency)
TOKYO, May 18 - Standard & Poor's Ratings Services said today that its ratings on Hyundai Motor Co. (BB+/Positive/--) would not be affected by the recent announcement that DaimlerChrysler AG (BBB/Negative/A-2) will sell its 10.5% stake in Hyundai Motor and terminate plans to establish an engine joint venture in Korea.
"The ratings on Hyundai Motor will continue to be based on the carmaker's own credit merits, namely its dominant position in the Korean automobile market, its growing but limited global position, and its ability to generate solid profitability despite highly competitive markets," said Standard & Poor's credit analyst Eun Jin Kim.
Hyundai Motor's alliance with DaimlerChrysler was limited to the development of commercial-vehicle engines, and the future benefits of access to technologies and cost reductions from joint procurement.
The Korean Won (W) 60 billion that Hyundai Motor paid for DaimlerChrysler's 50% stake in the engine joint venture is not expected to affect the financial standing of Hyundai Motor, which is underpinned by parent-only cash and equivalents of about W4.8 trillion at the end of March 2004.
In addition, no immediate impact is expected on the consolidated financial status of Hyundai Motor, as joint venture operations had yet to begin.