Hyundai WIA Significantly Expands Research Organizations to Target Exports [Yang Nakgyu's Defence Club]

Hyundai Wia is the only domestic artillery manufacturer in South Korea. Since mass-producing the 4.2-inch mortar in 1977, the company has produced approximately 20,000 artillery barrels. It exclusively supplies the barrels for the K-2 tank by Hyundai Rotem and the K-9 self-propelled howitzer by Hanwha Aerospace, both of which are core products in the K-Defense sector.

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Sales have also increased. Cumulative revenue in the special division has grown each year, reaching 188.4 billion KRW in 2020, 194.8 billion KRW in 2021, 185.8 billion KRW in 2022, 223.1 billion KRW in 2023, and 344.8 billion KRW in 2024. In the first half of this year, sales amounted to 189.7 billion KRW, up 26% compared to the same period last year. The proportion of the special division within Hyundai Wia's total sales also expanded from 2% in 2022 to 4% in 2024. Hyundai Wia expects its special business sales to grow by about 10% annually through 2030. The projected revenue for 2030 is approximately 700 billion KRW, more than double last year's annual figure of 344.8 billion KRW.

The impact of K-Defense exports is also significant. As the volume of K-2 tanks and K-9 self-propelled howitzers exported to Poland has increased, so has the demand for artillery barrels and other weapon assemblies that Hyundai Wia supplies to defense contractors. Previously, Hyundai Rotem and Hanwha Aerospace each secured multi-trillion KRW projects from the Polish Armaments Agency in 2022 to supply K-2 tanks and K-9 self-propelled howitzers, respectively.

However, most of the export performance is concentrated in the K-2 tank and K-9 self-propelled howitzer, making it necessary to expand the defense parts lineup and diversify sales channels for long-term growth. Hyundai Wia has no export record other than weapon assemblies for the K-2 tank and K-9 self-propelled howitzer. Hyundai Rotem also has no defense export record apart from the K-2 tank exports to Poland. Due to heightened military tensions worldwide-caused by the Russia-Ukraine war, the conflict between Israel and Iran, and the war involving Hamas-an arms race is intensifying, making it essential to pioneer new markets. According to market research firm Spherical Insights & Consulting, global defense spending is expected to increase by an average of 8% annually through 2035.

Hyundai Wia plans to respond to global artillery demand by developing mobility-based firepower systems such as lightweight 105mm self-propelled howitzers. To this end, Hyundai Wia expanded its defense research organizations from two in 2022 to five this year. While the company's main business used to be engine modules, it has now expanded into electric vehicle thermal management components. Hyundai Wia is restructuring its business model from a focus on internal combustion engine vehicles to electric vehicles and the defense sector.

The company is also reorganizing its internal structure to target exports. Hyundai Wia has experience exporting 105mm towed howitzers to Chile and, between 2009 and 2015, exported 54 units of 105mm towed howitzers and 18 units of 155mm towed howitzers to Indonesia. To expand its defense exports and other business areas, Hyundai Wia sold its core machine tool division-which had been maintained for 49 years-to the Rilson Private Equity and Smac consortium for 340 billion KRW. This division had recorded losses for six consecutive years since 2017.

The company is also actively participating in international defense exhibitions. Hyundai Wia attended the '2023 International Defence Exhibition' (IDEX) in the United Arab Emirates in February 2023, 'WDS 2024' in Saudi Arabia in February 2024, 'SITDEF 2025' in Peru in April this year, and 'INDO Defence 2025' in Indonesia in June. This year, the company will participate in 'MSPO 2025,' the largest defense exhibition in Eastern Europe. MSPO will be held in Kielce, Poland, from September 2 to 5 (local time). At last year's MSPO, Hyundai Wia and Kia jointly showcased a weapon combining a 105mm howitzer and a light tactical vehicle (KLTV).

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