South Korea's Hanwha Corp. has announced plans to form a new Canadian joint venture to manufacture military vehicles if it secures a multibillion-dollar government contract to supply submarines to Canada. The announcement was made by the Automotive Parts Manufacturers' Association of Canada (APMA) and Hanwha representatives during a news conference in Vaughan, Ontario.
Joint Venture Details
The proposed joint venture would be a partnership between Hanwha and the APMA, with the association's president, Flavio Volpe, stating that he would chair the board. The venture would be majority Canadian-owned and have a majority Canadian board, comprising a consortium of auto-parts manufacturers. Volpe emphasized that the success of the venture hinges on Hanwha winning the submarine bid.
Planned Military Vehicles
The joint venture intends to produce the K9 Thunder self-propelled howitzer, a tank-like vehicle, along with its support vehicle, the K10 ammunition resupply vehicle. Other potential products include the Redback infantry fighting vehicle, the Chunmoo multiple launch rocket system, and uncrewed ground vehicles. Volpe clarified that the venture would not enter the passenger vehicle market, as Canadian auto-parts companies cannot compete with their customers in that segment.
Strategic Context
The auto sector is Canada's second-largest export, yet none of the five automakers operating in the country are Canadian-owned. Volpe has previously advocated for studying the benefits of establishing a domestic automaker. Under his leadership, the APMA has developed demonstration vehicles entirely from Canadian supply chains through Project Arrow. The joint venture with Hanwha would focus on government defense contracts, ensuring that increased military spending flows back into the Canadian economy.
Submarine Contract Competition
The federal government shortlisted two bidders for the submarine contract in August: Hanwha and TKMS AG & Co. KGaA, a German-Norwegian joint venture. The contract, expected to be awarded in June, is valued at approximately $25 billion for the submarines, with additional tens of billions for infrastructure and maintenance. Hanwha has been announcing side deals with Canadian companies and organizations as it awaits the decision.
This initiative represents a significant step toward strengthening Canada's defense manufacturing capabilities and integrating South Korean expertise with Canadian industrial capacity.
