South Korea Aims for Global Defense Power with European Strategy

South Korea’s defense firms are intensifying their focus on European markets as part of a strategic initiative aimed at becoming one of the world’s top four arms exporters by 2030. At the Korea Investment Week 2025 in Seoul, Ryu Kwang-soo, executive vice president of Hanwha Aerospace Co., outlined the “Made in Europe by Korea” strategy, emphasizing the importance of local manufacturing to gain a foothold in the competitive European defense sector.

Ryu highlighted that Europe is a significant opportunity for Korean defense contractors. However, he cautioned that the European Union’s growing protectionist measures necessitate a comprehensive localization approach for successful market entry. “It is impossible to penetrate without a thorough localization strategy,” he stated.

The shift in Europe’s security landscape, particularly following Russia’s invasion of Ukraine, has prompted increased defense spending across the continent. In 2022, EU defense expenditure reached €326 billion (approximately $382 billion), reflecting a 64% increase from €198 billion in 2020. As part of its long-term strategy, the EU aims to reduce reliance on US arms and increase the proportion of domestically produced weapons from 20% to over 60% by 2035.

These developments present both opportunities and challenges for Korean arms suppliers. Hanwha is currently establishing production facilities in Poland to manufacture K9 self-propelled howitzers and Chunmoo multiple rocket launchers. The company is also engaging in joint research and development projects in Germany and Norway to create next-generation defense systems.

Ryu emphasized that local production and technology transfer are crucial for establishing a strong presence in Europe’s defense ecosystem. “Transferring technology and producing locally will anchor us in Europe’s defense ecosystem and ensure long-term competitiveness,” he remarked during the event.

Hyundai Rotem Co., another key player and a subsidiary of Hyundai Motor Group, echoed the call for localization. Vice President Lee Jung-yeop stated, “Localization is not an option; it is a must.” He pointed out that countries increasingly demand not only the purchase of military equipment but also technology transfer and local assembly to develop a robust supply chain.

Hyundai Rotem is supplying K2 tanks and K808 armored vehicles to various European nations, including Poland and Peru. The company plans to customize models and set up assembly lines in these markets. “If you help build a defense ecosystem in the importing country, it leads to follow-on orders and maintenance, repair, and operations contracts, creating a sustainable revenue model,” Lee explained.

Industry experts anticipate that these tailored localization strategies could boost South Korea’s defense export 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), underscored the evolving nature of defense manufacturing, stating, “It is no longer just about making good hardware. We must design supply chains, markets, and partnerships in harmony, both at home and abroad.”

As South Korea’s defense industry seeks to elevate its global standing, the focus on localization and strategic partnerships in Europe will be pivotal in shaping its future trajectory.