K2 Tank Manufacturers Hold 3rd Mass Production Kickoff Meeting... Urging 'Early Contract Signing'

Hyundai Rotem K2 Tank

[Photo by Hyundai Rotem]

[Asia Economy Reporter Ki-min Lee] Hyundai Rotem and other system and parts suppliers related to the K2 tank have begun work to carry out the 3rd mass production project. The companies urged the government to promptly proceed with the mass production contract to overcome management difficulties caused by delays in the 2nd mass production project and the impact of the novel coronavirus disease (COVID-19).

Hyundai Rotem announced on the 10th that it recently held the ‘K2 Tank 3rd Mass Production Kick-off Council’ with 13 major core parts suppliers at Hyundai Rotem headquarters in Uiwang-si, Gyeonggi-do. Hyundai Rotem explained that this meeting was an opportunity for K2 tank system companies and related specialized companies to discuss production and parts supply schedules to ensure smooth adherence to the deployment schedule in preparation for the 3rd mass production contract.

At the meeting, Hyundai Rotem and key partners proactively reviewed the overall project schedule and major material requirements and procurement schedules, agreeing that the K2 tank 3rd mass production project must proceed normally. The K2 tank 3rd mass production project had 35 billion KRW allocated in this year’s budget at the National Assembly plenary session last December, and a contract with the Defense Acquisition Program Administration (DAPA) is scheduled for this year. Hyundai Rotem and related companies stated that if the 3rd mass production contract is signed this year, tank deliveries will be completed by 2023.

However, concerns were raised at the meeting that if the 3rd mass production contract is delayed, more than 1,100 small and medium-sized partner companies, including major K2 tank-related firms, could suffer damage. Previously, the 2nd mass production project for the K2 tank was contracted in 2014, but the domestically produced transmission failed durability tests, causing the project to be delayed for over two years. As a result, major partners reportedly faced management difficulties due to inventory burdens. The 2nd mass production project decided in 2018, four years after the contract signing, to introduce German transmissions, and full-scale tank production and delivery are currently underway.

A representative from Company A, which attended the meeting, said, “The 2nd mass production project experienced significant difficulties due to delays in the project period and finished vehicle delivery caused by the transmission change, but if the 3rd mass production project proceeds quickly, it could provide relief,” adding, “We hope the government understands the hardships of defense companies and accelerates the 3rd mass production.”

Additionally, Hyundai Rotem and its partners appealed that the 3rd mass production contract must be signed promptly alongside the ongoing review by DAPA regarding the application of domestically produced transmissions. These companies expect that if the 3rd mass production contract is signed early, the 35 billion KRW budget allocated this year can be executed ahead of schedule. They stated that in the worsening economic conditions due to the COVID-19 impact, early execution of the K2 tank 3rd mass production budget could serve as a strong support for small and medium-sized partner companies desperately needing to overcome management difficulties.

A Hyundai Rotem official said, “Through this meeting, we proactively discussed production and parts supply schedules with partners to thoroughly carry out the K2 tank 3rd mass production project contract,” adding, “If the 3rd mass production contract is signed early, continuous production following the 2nd mass production will be possible, maximizing production efficiency and positively contributing to resolving the management difficulties faced by the domestic defense industry amid harsh business conditions.”

This content was produced with the assistance of AI translation services.