Hyundai Motor expands in defense to diversify beyond autos

Hyundai WIA, Kia, and Hyundai Rotem ramp up military R&D and exports as global auto risks grow

Hyundai Motor Group affiliates are stepping up their push into the defense sector as part of a broader strategy to reduce dependence on their core automotive operations and establish new growth engines.

The move reflects the group’s shift toward high-potential markets, including defense, amid global headwinds.

According to industry sources on Jul. 14, Hyundai WIA has posted significant growth in its defense segment over the past five years. The company’s special business division, responsible for defense operations, reported 344.8 billion won ($250 million) in revenue in 2024, up from 188.4 billion won in 2020. First-quarter revenue this year reached 93.8 billion won ($69 million), a 34.4% increase from the same period in 2024.

Hyundai WIA supplies weapon systems—specifically gun assemblies comprising barrels and automatic loaders—for the K2 Black Panther tank and K9 Thunder self-propelled howitzer. Rising exports of both platforms have contributed to the division’s rapid growth.

Lightweight 105mm self-propelled howitzer developed by Hyundai WIA/Hyundai WIA

The company also announced plans to establish itself as a specialized artillery systems integrator. Last year, it introduced a lightweight 105mm self-propelled howitzer mounted on Kia’s light tactical vehicle, offering a mobile alternative to conventional models that require 2.5-ton trucks for towing.

Hyundai WIA and Kia have been manufacturing military tactical vehicles and artillery since the 1970s. The new 105mm platform combines their expertise in vehicle and weapon systems to deliver improved mobility and firepower.

Hyundai WIA has ramped up research and development efforts in defense, increasing the number of defense-focused R&D teams from two in 2022 to five this year. The company, which traditionally focused on engine modules, has been shifting toward electric vehicle thermal management systems and defense technologies, moving away from its internal combustion engine-centered business model.

Visitors examine the multipurpose unmanned vehicle “HR-Sherpa” at the Republic of Korea Armed Forces’ promotional booth during the 2025 Unmanned System World Congress at COEX in Seoul’s Gangnam District on July 9, 2025./Yonhap

Hyundai Rotem is also expanding its defense portfolio with the HR-Sherpa, a six-wheeled electric unmanned ground vehicle designed for both military and civilian applications. The platform combines Hyundai Mobis’ autonomous driving technologies with Hyundai Rotem’s unmanned systems. The South Korean Army has acquired two units through a rapid procurement program, and Hyundai Rotem is now competing with Hanwha Aerospace for further contracts.

Subsidiaries such as Hyundai WIA, Hyundai Rotem, and Kia are actively promoting their products in overseas defense exhibitions in an effort to tap into global markets.

To date, Hyundai WIA’s only defense exports involve gun assemblies for the K2 and K9 platforms. Kia’s military vehicle exports have been on a downward trend, falling from 522 units in 2020 to 442 in 2021, 302 in 2022, and 330 in 2024. Hyundai Rotem has not secured any major overseas defense deals beyond the K2 tank export contract with Poland.

Few global automakers operate in the defense sector. As many carmakers struggle with steep U.S. import tariffs, Hyundai Motor Group affiliates are increasingly eyeing the defense industry as a viable alternative revenue source.

“With the administration of U.S. President Donald Trump imposing a 25% tariff on all imported cars since April, there is growing concern that Hyundai Motor Group’s multi-year growth trajectory could stall this year,” an industry official said. “Under these circumstances, the defense market is emerging as a promising new source of income.”

[Kim Ji-hwan]

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