South Korea’s defense companies are accelerating efforts to build weapons in Europe as they look to cement their place among the world’s top four arms exporters by 2030.
Speaking at Korea Investment Week (KIW) 2025 in Seoul on Monday, Ryu Kwang-soo, executive vice president of Hanwha Aerospace Co., said: “With our ‘Made in Europe by Korea’ strategy, we expect Korea to leap into the global top four defense powers.”
He said that while Europe represented “a land of opportunity” for Korean contractors, the European Union’s increasingly protectionist stance means “it is impossible to penetrate without a thorough localization strategy.”
Korea Investment Week (KIW) 2025
Europe’s security landscape has been upended since Russia’s full-scale invasion of Ukraine.
EU defense spending reached 326 billion euros ($382 billion) last year, up 64% from 198 billion euros in 2020, with Brussels aiming to reduce its reliance on US arms and increase the share of weapons built within the bloc to more than 60% by 2035, from its current 20%.
Analysts say this will create both opportunities and challenges for Korean weapons suppliers seeking to establish a foothold in the region.
Hanwha is constructing factories in Poland to produce K9 self-propelled howitzers and Chunmoo multiple rocket launchers, while pursuing joint R&D projects in Germany and Norway to develop next-generation systems.
Hanwha Aerospace and Hanwha Systems showcase the K9 self-propelled howitzer at World Defense Show 2024 held in Riyadh, Saudi Arabia
“Transferring technology and producing locally will anchor us in Europe’s defense ecosystem and ensure long-term competitiveness,” Ryu said at KIW 2025, an annual event organized by The Korea Economic Daily and Korea Investment & Securities Co.
HYUNDAI ROTEM, KAI ECHO THE SAME MESSAGE
Hyundai Rotem Co., a defense affiliate of Hyundai Motor Group, echoed that message.
“Localization is not an option, it is a must,” said Lee Jung-yeop, vice president of the company. “Importing countries increasingly demand not only purchases but also technology transfer, local assembly and supply chain development.”
Hyundai Rotem’s booth at MSPO expo
Hyundai Rotem is supplying K2 tanks and K808 armored vehicles to more than a dozen countries in Europe, including Poland and Peru, and plans to tailor models and establish assembly lines in customer markets.
“If you help build a defense ecosystem in the importing country, it leads to follow-on orders and MRO [maintenance, repair and operations] contracts, creating a sustainable revenue model,” Lee said.
The first flight of the KF-21 prototype No. 4 on Feb. 20, 2023 (Courtesy of KAI)
Industry officials forecast that such bespoke localization strategies will drive Korea’s overseas defense orders to $30 billion by 2030 from an estimated $10 billion this year.
Choi Jong-won, an executive at Korea Aerospace Industries Ltd. (KAI), said: “It is no longer just about making good hardware. We must design supply chains, markets and partnerships in harmony, both at home and abroad.”
Write to Jin-Won Kim and Eunhyeok Ryu at jin1@hankyung.com
In-Soo Nam edited this article.