[Yang Nak-gyu's Defence Club] Additional Production of K2 Tanks... What About Domestic Powerpacks?

Domestic Power Pack Defect Leads to Contract Termination with SNT Heavy Industries... 20 Billion KRW Compensation to Hyundai Rotem

[Asia Economy Yang Nak-gyu, Military Specialist Reporter] As the South Korean military is reportedly preparing for the 4th batch production of the K2 tank, interest is growing over whether it will be able to equip the tank with a domestically produced powerpack. The K2 tank, nicknamed Heukpyo (Black Panther), has undergone 1st batch production (100 units), 2nd batch production (106 units), and 3rd batch production (54 units), but due to repeated failures in developing a domestic powerpack, it has used foreign-made powerpacks.

▲Will the 4th batch production of the K2 tank gain momentum?= The Army holds the position that additional production of the K2 tank is necessary to completely replace the M48 series tanks. Through the 4th batch production, the number of K2 tanks should be increased to around 360 units. Currently, the Army operates about 200 M48A3K tanks and about 400 M48A5K tanks in active service.

The M48 series tanks lack fording capability, cannot fire while on the move, and do not have active protection systems or reactive armor. The M-series tanks operated by seven divisions are severely aged, with mobility dropping from 50 km/h to 20-30 km/h. Repair and maintenance costs are also high; as of 2011, a total budget of 17.339 billion KRW was allocated for maintenance of M48A5K tanks, averaging about 35 million KRW per tank annually. Notably, out of 4,773 repair parts, production of 906 items has been discontinued. Production of tank barrels ceased in 2019.

The defense industry also supports the need for additional production. Kim Sang-hap, chairman of Hyundai Rotem’s branch, lamented at a meeting held on the 23rd at Changwon City Hall, saying, "With the 3rd batch production quantity of the K2 tank reduced to half of the 2nd batch, about 1,100 domestic small and medium-sized partner companies face a situation where they have no work and may have to shut down."

▲Will the 4th batch K2 tanks be equipped with domestic powerpacks?= The ‘powerpack’ installed in the K2 tank is a term that combines the engine, transmission, and cooling system. It is a core device that drives the tank, which costs over 10 billion KRW per unit, and controls speed and direction. The powerpack is known as the ‘heart of the tank.’

The military has attempted to domestically produce the powerpack but has repeatedly failed. Recently, Hyundai Rotem, which manufactures the K2 tank, terminated its contract with SNT Heavy Industries, the company producing the transmission part of the powerpack. Due to this termination, SNT Heavy Industries compensated Hyundai Rotem over 20 billion KRW. This is why there are expectations that the domestic powerpack will not be used in the 4th batch production either.

The development project for the domestic transmission of the K2 tank’s powerpack was undertaken by SNT Heavy Industries from 2005 to 2014 with an investment of 48.5 billion KRW. However, even though the 2nd batch production of the K2 tank began in 2016, the domestic transmission intended for the powerpack failed durability tests. Subsequently, in 2018, the Defense Acquisition Program Administration decided to install a hybrid powerpack combining a domestic engine with a German-made transmission.

The Ministry of National Defense and the Defense Acquisition Program Administration revised defense standards due to repeated failures in domestic powerpack development. They moved away from the vague durability criterion of ‘no defects during testing’ and specifically defined defects. Defects were defined as loss of basic transmission functions such as shifting, steering, braking, or severe performance degradation that prevents further testing. This sparked controversy over preferential treatment toward the company.

A government official said, “At present, even if the 4th batch production proceeds, the possibility of using a domestic powerpack is slim,” adding, “Also, if efforts are made to equip domestic powerpacks, criticism may arise that the military is once again being held back by the company that has delayed tank production for over 10 years.”