Hyundai Rotem Holds 3rd K2 Tank Mass Production Meeting: "Contract Urgently Needed Within the Year"

Partners "Concerned that delays in transmission quality inspection may postpone the signing of the 3rd mass production project"

Hyundai Rotem K2 Tank

[Asia Economy Reporter Ki-min Lee] Hyundai Rotem recently held the ‘K2 Tank 3rd Batch Mass Production Contract Preparation Review Meeting’ at its headquarters in Uiwang, Gyeonggi Province, with representatives from 13 major core component companies including Hanwha Systems, LIG Nex1, Hyundai Wia, and Doosan Infracore, the company announced on the 12th.

This meeting was organized to share the progress of the K2 Tank 3rd batch mass production project between Hyundai Rotem and key partners and to prepare for the contract signing within this year.

As the system integrator, Hyundai Rotem is currently conducting practical reviews with the Defense Acquisition Program Administration (DAPA) regarding the K2 Tank 3rd batch mass production contract and urged active cooperation from its partners to finalize the contract within this year.

Representatives from major partner companies mentioned the recent delays in the quality inspection of the transmissions and expressed concerns that if the K2 Tank 3rd batch mass production contract is not signed within this year, over 1,100 small and medium-sized suppliers could suffer significant damage. They also requested Hyundai Rotem to consider various measures to ensure the contract is signed within the year to support the survival of defense industry companies.

DAPA revised the national defense standards for the K2 Tank transmissions in July and decided to install domestically produced transmissions in the 3rd batch mass production project if the quality inspections based on the revised standards show no issues. However, the quality inspection of the transmissions is currently delayed. Due to this, K2 Tank partners are worried that the contract for the 3rd batch mass production project, which is scheduled with a budget allocation of 35 billion KRW this year, might be postponed. In September, small and medium-sized K2 Tank partners facing financial difficulties sent an appeal letter to the National Assembly’s Defense Committee and DAPA, requesting the contract be signed within the year considering the challenging environment of the defense industry.

During the 2nd batch mass production project of the K2 Tank, the contract was delayed for over two years due to durability test issues with the domestic transmissions, causing inventory burdens and financial difficulties for partners. This year, the situation worsened due to the COVID-19 pandemic, and companies agreed that further delays in the 3rd batch mass production project would deal a heavier blow to small and medium-sized enterprises.

A representative from a parts company attending the meeting said, “We have already invested funds in producing parts for the K2 Tank 3rd batch mass production, which has created fixed cost burdens, and we are also experiencing financial difficulties due to COVID-19.” He added, “We hope the government will step in and ensure the contract for the K2 Tank 3rd batch mass production is signed within this year so that employees working in the defense industry do not lose their jobs.”

A Hyundai Rotem official also stated, “With growing interest in the K2 Tank from countries in the Middle East and Eastern Europe, stable deployment is essential for overseas exports.” He added, “We will do our best as the system integrator to finalize the 3rd batch mass production contract within this year to alleviate the financial difficulties of domestic defense companies worsened by COVID-19 and to accelerate K2 Tank exports.”

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