As the United States begins to reduce federal government expenditure, the possibility of cuts to the defense budget has been raised; however, an analysis released on the 29th indicated that STX Engine will not be significantly affected.
According to foreign news reports, including The Washington Post, U.S. Defense Secretary Pete Hegseth reportedly directed senior officials at the Ministry of National Defense to draft a plan to cut the budget by 8% annually over the next five years.
STX Engine projected that even if the United States actually cuts the defense budget, the impact will be primarily limited to U.S. defense contractors. Given that STX Engine's business is focused on Korea and the Asia-Pacific region, this means there will be no direct impact from reductions in the U.S. defense budget.
STX Engine maintains that it is showing solid growth based on its independent technological competitiveness and stable business orders. In fact, in March of this year, STX Engine secured a contract worth approximately 840 billion won to supply diesel engines for the Australian Redback armored vehicle, with plans to gradually deliver engines by 2027 and promote local technology transfer.
Last February, STX Engine signed a long-term contract worth about 312.4 billion won to supply diesel generator engines to Hanwha Ocean until 2028. Starting in September of the same year, it also began mass production of domestically produced diesel engines (SMV1000) for K9 self-propelled howitzers. According to STX Engine, this engine enabled the replacement of existing German components, allowing the export of domestic defense products like the K9 self-propelled howitzer to third countries without the approval of the German government.