Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Canadian sub deal hinges on carmaker cooperation
Hanwha Group Vice Chairman Kim Dong-kwan, right, introduces the ROKS Jang Yeong-sil submarine to Canadian Prime Minister Mark Carney, second from right, and Prime Minister Kim Min-seok, center, at Hanwha Ocean's shipyard on Geoje Island, South Gyeongsang Province, Oct. 30, 2025. Yonhap
By Park Jae-hyuk
Hyundai Motor may bear costs for greater good
Carmakers Hyundai Motor and Volkswagen have emerged as key players in the ongoing competition between Hanwha Ocean and TKMS to secure Canada’s order for 12 patrol submarines worth 60 billion Canadian dollars ($43 billion), which would be the largest single order in Korea’s defense export history if it were to win the bid.
Amid Ottawa’s request for Korea and Germany to invest in Canada’s automotive industry in exchange for the massive submarine deal, market watchers are now focusing on whether Hyundai Motor will play its part in the project, which has already been elevated to a government-to-government initiative.
According to sources familiar with the matter Friday, senior executives from Hyundai Motor and Hanwha Ocean will accompany presidential chief of staff Kang Hoon-sik and industry minister Kim Jung-kwan on their trip to Canada later this month to meet with Canadian Prime Minister Mark Carney and other top officials. Kang has served as Korea’s special envoy for strategic economic cooperation, tasked with visiting countries interested in purchasing Korean defense products.
Although the government said no final decision has been made on the trip to Canada, speculation about the visit is widely believed to be true, given Kang’s recent confirmation that Canadian Industry Minister Melanie Joly asked for Hyundai Motor’s investment to “offset” the submarine purchase.
“Canada is intensifying Korea’s competition with Germany by saying, ‘We’ll buy weapons, but we need something in return,’ and ‘Germany’s Volkswagen is open to our request,’” Kang said earlier this month during his appearance on the YouTube channel of political commentator Kim Ou-joon.
Hyundai Motor Group Executive Chair Chung Euisun, left, and Hanwha Group Vice Chairman Kim Dong-kwan, right, talk with Samsung Electronics Executive Chairman Lee Jae-yong at a hotel in Riyadh, Oct. 23, 2023, during a banquet for business leaders accompanying then-President Yoon Suk Yeol on his state visit to Saudi Arabia. Newsis
The Globe and Mail, a Canadian newspaper, also reported Thursday that Ottawa requested Korea to secure Hyundai Motor’s commitment to set up production in Canada and urged Germany to expand Volkswagen-related auto manufacturing in the country.
Volkswagen has already pledged to build an electric vehicle battery plant in Ontario through its subsidiary, PowerCo. Rumors of a potential collaboration between TKMS and MAN Energy Solutions, another Volkswagen subsidiary, on marine propulsion systems have also fueled investor optimism about Volkswagen’s additional investment in Canada, boosting TKMS shares.
In contrast, Hyundai Motor does not have a production facility in Canada.
If the Korean automaker adds such a facility to its existing plants in the U.S. states of Alabama and Georgia, it could face higher costs due to the Donald Trump administration’s tariff on cars imported from Canada, aimed at protecting U.S. manufacturing jobs.
Still, there remains a possibility that the Korean government will offer various incentives to encourage Hyundai Motor’s participation.
If that happens, Hyundai Motor and Hanwha could seize another opportunity to contribute to a government-level initiative, as they did during the Korea-U.S. trade talks last year through their respective investments in Hyundai Steel’s new plant in Louisiana and Hanwha Ocean’s shipyard in Philadelphia.
The government has publicly underscored the importance of winning the Canadian submarine project.
During a breakfast meeting with defense industry leaders last month, Prime Minister Kim Min-seok said that he had told Carney, “Your counterpart is not Hanwha but Korea as a whole,” when the Canadian leader visited Hanwha Ocean’s shipyard on Geoje Island, South Gyeongsang Province, last October.