Hyundai Motor Group affiliates are expanding their footprint in the defense industry market. Following the group's principle that they must reduce their reliance on complete vehicle businesses and create independent growth foundations, they are turning their attention to the growing defense market.
According to business sources on the 14th, HYUNDAI WIA's defense sector has seen a steep increase in revenue over the past five years. The revenue of the special business division responsible for defense rose from 188.4 billion won in 2020 to 344.8 billion won last year. In the first quarter of this year, revenue amounted to 93.8 billion won, a 34.4% increase compared to the same period last year (69.8 billion won).
HYUNDAI WIA supplies weapon assembly systems (including barrels and automatic loading devices) for the K2 tank and K9 self-propelled howitzer, reflecting the increase in exports of these two weapons.
HYUNDAI WIA has also announced plans to establish itself as a specialist in artillery systems. Last year, it unveiled a lightweight self-propelled howitzer for the first time. This howitzer is a product that mounts a reduced-weight 105mm cannon on Kia's lightweight tactical vehicle, which previously required a 2.5-ton truck for towing.
Military tactical vehicles and artillery have been produced by Kia and HYUNDAI WIA since the 1970s. The lightweight 105mm self-propelled howitzer is a weapon system created by leveraging the strengths of both Kia and HYUNDAI WIA.
HYUNDAI WIA has increased the number of research organizations in the defense sector from two in 2022 to five this year. HYUNDAI WIA's previous core business was engine modules, but it has now expanded into thermal management for electric vehicle parts. The company is restructuring its business focus from internal combustion engine vehicles to electric vehicles and the defense sector.
Hyundai Rotem is taking on new market challenges with HR-Sherpa, a multipurpose unmanned vehicle. The HR-Sherpa is an independently driven six-wheeled vehicle based on an electric motor. It combines the driving technology of Hyundai Mobis with the unmanned system technology of Hyundai Rotem. Currently, the Army has introduced two units through a rapid prototype project, and Hyundai Rotem is competing with Hanwha Aerospace for additional orders from the Army.
Kia, HYUNDAI WIA, and Hyundai Rotem are consistently participating in overseas defense exhibitions, making efforts to explore international markets.
HYUNDAI WIA has no export records except for weapon assembly systems for the K2 tanks and K9 self-propelled howitzers. Export volumes for Kia's defense sector have continued to decline, with 522 units in 2020, 442 units in 2021, 302 units in 2022, and projected at 330 units in 2024. Hyundai Rotem also has no export records in the defense sector, except for the K2 tank to Poland.
Among global complete vehicle groups, there are few that operate in the defense business. Recently, many complete vehicle groups have been facing challenges due to high tariffs imposed by the U.S., but Hyundai Motor Group affiliates are seeking opportunities in the defense market.
An industry official noted, "The Donald Trump administration in the United States imposed a 25% tariff on all imported cars starting in April, increasing the likelihood that the growth trend of Hyundai Motor Group, which has persisted over the past few years, will be diminished this year. In this situation, the defense market may become a new source of revenue."