Hanwha Aerospace (Hanwha Aerospace) and corporations in Korea's defense industry, including Hyundai Rotem, are treating the European ground weapons market as next year's core business and are going all out to win contracts. The situation is getting tougher as local firms step up checks using the European Union (EU) loan program for joint weapons purchases, but it is essential to compete in Europe to achieve the export target of $20 billion (about 29 trillion won). The defense industry is also calling for the government to propose an industrial cooperation plan in addition to sending special envoys.
According to the defense industry on the 14th, Hanwha Aerospace is preparing to participate in weapons acquisition programs in multiple European countries. First is Romania's infantry fighting vehicle (IFV) procurement. The scale is expected to be about 5.13 trillion won. Hanwha Aerospace, fronting the Redback, set local production in Romania as its core strategy and began promotion. In Jul. last year, it signed a 1.38 trillion won export contract for K9 self-propelled howitzers with Romania and began building a local plant, and it is pushing a strategy of localizing IFVs and technology transfer at this plant.
Hanwha Aerospace's competitor is Germany's Rheinmetall, fronting the IFV Lynx. Like Hanwha Aerospace, Rheinmetall has put local production and technology transfer at the forefront. It plans to partner with Romanian corporations to produce IFV components, anti-air ammunition, propulsion systems and more in Romania. It also said it would establish a center in Romania to provide local personnel with the operation and production of the Lynx and technology for maintenance, repair and overhaul.
As a result, the two companies' strategies are similar. But Germany is a participant in SAFE (Security Action For Europe), the EU's joint weapons procurement program. SAFE is a 150 billion euro (about 255 trillion won) military procurement fund and part of Europe's rearmament program. Its core is providing low-interest loans to member states that jointly purchase weapons. However, it requires a 65% localization rate from purchasing member states. From Romania's standpoint, it is more favorable than guarantees or loans from the Korean government.
A defense industry official said, "From our standpoint, raising the localization ratio higher than competitors is the best option we can propose at the corporations level," adding, "Even so, since the arm naturally bends inward, additional government support is needed to raise the probability of winning contracts."
Hyundai Rotem is aiming to expand the market for K2 tanks in Europe. In Romania, demand has emerged to modernize aging ground weapons as the Russia-Ukraine war drags on. In Oct., Romania's Minister of Economy and other senior government officials visited Hyundai Rotem's Changwon plant. Hyundai Rotem is building K2 tank facilities at the Bumar plant under Poland's state-owned defense company PGZ, with plans to use it as a forward base in Europe.
Spain is being targeted for a self-propelled howitzer procurement. According to foreign media, Spain is considering acquiring 128 self-propelled howitzers, and the project is valued at up to 4.516 billion euros (about 8 trillion won). Hanwha Aerospace is expected to front a package including the K9 self-propelled howitzer and K10 ammunition resupply vehicle. Spain has not yet purchased a Korean weapons system.
Norway and Estonia are also cited as targets. Norway is currently weighing Hanwha Aerospace's Chunmoo multiple rocket launcher against the High Mobility Artillery Rocket System from Lockheed Martin in the United States. Estonia is also weighing the two weapons systems. The Minister of the Ministry of National Defense of Estonia visited the Hanwha Aerospace and Hyundai Rotem booths at the Seoul International Aerospace and Defense Exhibition (ADEX) 2025 held in Oct. and looked over the Chunmoo and K2 tanks.
Sweden is reportedly considering procuring tanks to fill a capability gap before the Leopard 2A8, chosen as its next-generation tank, is delivered. Hyundai Rotem's K2 tank is included among the candidates, raising the prospect of additional exports. Although the procurement scales in Sweden, Norway and Romania are not large, observers say it is significant that additional exports would be made within Europe.
Meanwhile, achieving this year's export target of $20 billion for Korea's defense industry is effectively difficult. Defense exports hit a record high of $17.3 billion (about 23 trillion won) in 2022, fell to $13.5 billion (about 19 trillion won) in 2023, and dropped to $9.5 billion (about 13 trillion won) last year for two consecutive years, and are expected to be at a similar level this year.
Industry analysis says that to reach $20 billion in defense exports next year, Korea should focus on Europe, where weapons acquisition procedures are predictable. In the Middle East, the timing of contracts is hard to gauge. In the case of exporting K9 self-propelled howitzers to Egypt, it took 13 years to come through.
The industry also speaks with one voice that clear measures at the government level are needed. A defense industry official said, "Countries that place weapons orders often want a complete partner both militarily and industrially," adding, "Since benefits that individual defense corporations cannot provide are often required, the government needs to devise and support a national-level defense export strategy."