South Korea’s Defense Firms Target Global Top Four with European Strategy

South Korea’s defense companies are intensifying efforts to manufacture weapons in Europe, aiming to secure a spot among the world’s top four arms exporters by 2030. At the Korea Investment Week 2025 held in Seoul, Ryu Kwang-soo, executive vice president of Hanwha Aerospace Co., outlined the company’s ambitious “Made in Europe by Korea” strategy. He emphasized that this approach positions South Korea to become a formidable player in the global defense sector.

The shift towards local production is largely driven by the evolving security landscape in Europe, particularly following Russia’s full-scale invasion of Ukraine. Defense spending across the European Union reached €326 billion (approximately $382 billion) last year, a significant increase from €198 billion in 2020. With Brussels aiming to boost the percentage of weapons produced within the EU from 20% to over 60% by 2035, South Korean defense manufacturers face both opportunities and challenges.

Strategic Local Production Initiatives

Hanwha is actively establishing production facilities in Poland for its K9 self-propelled howitzers and Chunmoo multiple rocket launchers. The company is also pursuing collaborative research and development projects in Germany and Norway to innovate next-generation defense systems. Ryu noted, “Transferring technology and producing locally will anchor us in Europe’s defense ecosystem and ensure long-term competitiveness.”

Hyundai Rotem Co., part of the Hyundai Motor Group, echoed this sentiment. Lee Jung-yeop, vice president of Hyundai Rotem, stated, “Localization is not an option, it is a must.” The company is supplying K2 tanks and K808 armored vehicles to numerous European nations, including Poland and Peru. Hyundai Rotem plans to tailor its models and establish assembly lines in customer markets, reinforcing the necessity of building a local defense ecosystem.

Lee further explained that fostering a defense ecosystem in the host country can lead to additional orders and maintenance, repair, and operations (MRO) contracts, creating a sustainable revenue model.

Future Outlook and Financial Projections

Industry experts are optimistic that these localization strategies could propel South Korea’s overseas defense orders to $30 billion by 2030, up from an estimated $10 billion this year. Choi Jong-won, an executive at Korea Aerospace Industries Ltd. (KAI), emphasized that modern defense manufacturing is not just about producing quality hardware. He stated, “We must design supply chains, markets, and partnerships in harmony, both at home and abroad.”

The ongoing shifts in defense manufacturing and procurement practices across Europe signal a pivotal moment for South Korean defense firms. As they embrace localization and strategic partnerships, these companies are positioning themselves to significantly influence the future of the global defense market.