Iraq moves to buy 250 K2 tanks from South Korea
Hyundai Rotem is in active discussions to export its K2 main battle tank to multiple countries beyond Poland, according to a report published on January 22 by South Korean brokerage Kiwoom
In a research
note, Kiwoom Securities analyst Lee Han-gyeol wrote that Hyundai Rotem is holding export talks with Iraq, Peru, Romania, and Saudi Arabia as part of efforts to diversify its defense export markets. The report states that these discussions follow the company’s large-scale deliveries of K2 tanks to Poland and reflect continued overseas demand for South Korean ground combat systems.
According to the analyst, Hyundai Rotem signed a framework agreement with Peru in December last year to supply 54 K2 main battle tanks and 141 wheeled armored vehicles under a package valued at about $2 billion. The brokerage expects a follow-on implementation contract to be signed as early as the first half of this year, though no binding agreement has yet been announced by either government.
The report also notes that Iraq is reviewing the possible acquisition of up to 250 K2 tanks as part of a program to replace aging armored vehicles. Lee wrote that a high-level Iraqi delegation visited Hyundai Rotem’s production facilities last summer and that a contract valued at roughly $6.5 billion is expected to be signed later this year. No official confirmation has been issued by the Iraqi government or Hyundai Rotem.
Romania is also identified as a potential customer. According to Kiwoom Securities, the Romanian government allocated a budget of approximately €6.5 billion in the second half of last year for a next-generation tank program that aims to procure 216 main battle tanks. The K2 is described in the report as one of the leading candidates under consideration for the program, alongside other Western designs.
As noted by the analyst, these prospective deals would extend Hyundai Rotem’s armored vehicle footprint in Europe, the Middle East, and Latin America, building on the company’s existing production lines and export experience. The K2 Black Panther tank is equipped with a 120mm smoothbore gun, advanced fire-control systems, and active protection options, and is designed for both conventional and high-intensity operations.
While outlining the export outlook, Kiwoom Securities also revised expectations for Hyundai Rotem’s near-term financial performance. The brokerage estimates fourth-quarter revenue at 1.5487 trillion won, up 7.5 percent year-on-year, and operating profit at 279.1 billion won, an increase of 72.6 percent from the same period last year. The projected operating profit, however, remains below the market consensus of 323.4 billion won.
Lee attributed the slower-than-expected improvement in defense sector earnings to higher costs during the early production phase of second-batch contracts, particularly in the company’s defense solutions division. The report states that these cost pressures are expected to ease as production stabilizes.
The brokerage’s assessment follows earlier media reports and market speculation regarding Hyundai Rotem’s export pipeline, which prompted the company to issue a formal disclosure clarifying that it is conducting sales activities with several countries but that no final contracts have been concluded. Hyundai Rotem said it would provide updated disclosures once specific terms are finalized or within three months, in line with South Korean regulatory requirements.
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