Now, it’s K-vehicle: KG Mobility, Kia lead S.Korea’s military vehicle exports

South Korea’s once domestically focused automakers are making significant inroads into the global defense sector, with a string of recent contracts underscoring their growing appeal as suppliers of military and police vehicles.

The latest deal saw Spain’s Navy Marine Corps, also known as the "Infantería de Marina," take delivery in May of 14 Rexton SUVs from Korean automaker KG Mobility Corp. (KGM), in a contract valued at 500,000 euros ($570,000).

The deal was signed in January between Spain’s Navy and a local dealer of the Korean automaker, an SUV specialist formerly known as Ssangyong Motor Co.

Though relatively modest in scale, the purchase highlights a shift: South Korean vehicles, long seen as cost-effective alternatives in consumer markets, are now proving their mettle in the military arena.

Spain’s armed forces are already familiar with the Korean brand.

In 2023, the Spanish Army procured 60 Musso SUVs, another KGM model, for logistics transport.

Like the Rexton deal, that contract was secured through an open bidding process by local dealers rather than KGM itself, suggesting an expanding European footprint via indirect channels.

KG MOBILITY’S PRESENCE IN INDONESIA, LATIN AMERICA

Both the Rexton and Musso employ a body-on-frame chassis, favored for its durability and ability to withstand off-road abuse, making them suitable for deployment in rough terrain and extreme climates.

This structural design, more commonly found in trucks than in standard passenger cars, has become a key differentiator for KGM, an SUV specialist, as it courts more military contracts abroad, analysts said.

The company’s global defense ambitions stretch beyond Europe.

In May, KGM signed a production agreement with Indonesia’s state-owned defense company PT Pindad, which supplies over 70% of the country's military vehicles and equipment.

Under the deal, the Korean automaker plans to assemble 169,000 vehicles in Indonesia over the next seven years using a semi-knockdown (KD) production model, allowing for local assembly with imported kits.

Earlier in March, KGM also signed a memorandum of understanding with a state-owned entity under Peru’s Army to expand its supply of official-use vehicles, further cementing its footprint in Latin America’s emerging defense market.

KIA AS A KOREAN DEFENSE FIRM

While much of the attention in Korea’s defense exports has focused on tanks, artillery and missiles, automakers such as KGM and Kia Corp., Korea’s No. 2 automaker, are increasingly positioning themselves as viable suppliers of utility and personnel transport vehicles.

Kia, an affiliate of Korea’s top automaker Hyundai Motor Co., unveiled its Tasman military pickup concept at February’s IDEX arms expo in Abu Dhabi – the largest defense exhibition in the Middle East and Africa.

Though currently a prototype, analysts note the model’s off-road capability and ample cargo space make it well-suited for military operations in desert environments.

Last year, Kia also premiered its mid-sized standard military vehicles at the World Defense Show 2024 (WDS 2024) in Riyadh, Saudi Arabia.

Designated as Korea’s defense industry firm in 1973 and a military material supplier in 1976, Kia has been developing a wide range of combat vehicles.

Kia started mass-producing light tactical vehicles in 2010 when it also embarked on developing mid-sized standard vehicles.

In addition to supplying its military vehicles to Korean forces, it also exports them to several foreign countries, including the Philippines, Indonesia and Chile.

Analysts say the key to K-vehicles’ rise in the defense market is owing to the same factors that powered its consumer success: competitive pricing, high durability and growing brand trust.

“Military procurement decisions are rarely made on price alone, but South Korean vehicles are increasingly seen as reliable workhorses that deliver on performance,” said a defense industry consultant in Seoul.

Write to Gil-Sung Yang at vertigo@hankyung.com

In-Soo Nam edited this article.