Hyundai Rotem wins major arms deal with Peru

Analysts say Hyundai Rotem’s deal to supply K2 tanks to the Peruvian army signals a major push by South Korean defense companies into the Latin American market. The region has seen a surge in defense demand due to territorial disputes and aging weapons systems. Its defense market is projected to approach $100 billion within eight years.

Hyundai Rotem said on Dec. 10 that it signed a memorandum of understanding with the Peruvian army on Dec. 9 local time to deliver 54 K2 tanks and 141 K808 wheeled armored vehicles by next year. Although negotiations are ongoing, industry sources estimate the deal’s export value at more than $15 billion, potentially reaching $22 billion. It is the largest South Korean defense export to Latin America to date.

Latin America is emerging as a new export market for South Korean defense products, following Eastern Europe. Frequent civil wars and territorial disputes, combined with land, air, and naval equipment more than 30 years old, have created steady demand for weapons systems. The region is also considered more stable than Eastern Europe, where demand surged sharply after the Russia-Ukraine war. According to global market research firm IMARC Group, the Latin American defense market, valued at $61.36 billion last year, is projected to reach $96.83 billion by 2033.

Among Latin American countries, Peru has become the first target for South Korean defense companies. GlobalData, a global market research firm, projected that Peru’s defense budget, which totaled $2.1 billion last year, will grow by more than 6 percent annually through 2029. “Just as South Korean companies expanded into Europe starting with Poland, the common strategy is to use Peru as a base to expand into other Latin American markets, including Colombia, Uruguay, and Ecuador,” a defense industry source said.

Peru has a history of purchasing South Korean weapons, having previously received retired military equipment. In 2009, the South Korean air force donated eight retired A-37B attack aircraft to Peru. After experiencing the technical quality of South Korean aircraft, the Peruvian air force purchased 20 KT-1 basic trainer aircraft from Korea Aerospace Industries in 2012. KAI has continued to build on this relationship, actively pursuing additional sales of its FA-50 multirole fighter.

South Korean companies are also expanding into Peru’s naval defense sector as the Peruvian navy seeks to replace aging ships. Last month, HD Hyundai Heavy Industries signed a letter of intent with the Peruvian navy to jointly develop a 1,500-ton medium-class submarine based on its own submarine model. In addition, last year the company secured contracts for four vessels, including a frigate, an offshore patrol ship, and a landing ship.


최원영 기자 o0@donga.com