ExclusiveVolkswagen denies role in Canadian submarine bid

Volkswagen's logo is seen at the customer center of the carmaker's headquarters in Wolfsburg, Germany, Nov. 21, 2025. AFP-Yonhap

Volkswagen has made it clear that it has no involvement in the ongoing competition between shipbuilders from Korea and Germany to secure an order for 12 patrol submarines for the Canadian military, valued at 60 billion Canadian dollars ($43 billion).

The carmaker specifically denied any cooperation with TKMS or any intent to help the German shipbuilder win the bid.

“We want to clarify our position and prevent our investment in Canada’s battery plant from being misinterpreted as an attempt to help TKMS win the submarine contract,” Volkswagen’s German headquarters told The Korea Times Monday in an email sent via its local PR agency.

“Volkswagen Group’s investment in the Ontario battery plant is an independent decision made as part of the group’s electrification strategy.”

The statement came after it was revealed that Ottawa referenced Volkswagen’s planned investment when trying to persuade Seoul to have Hyundai Motor invest in Canada’s automotive industry in exchange for the massive submarine contract.

Presidential chief of staff Kang Hoon-sik confirmed earlier this month that Canadian Industry Minister Melanie Joly had asked Hyundai Motor to invest to “offset” the submarine purchase. According to Kang, Joly told him, “Germany’s Volkswagen is open to our request.”

Rumors had also circulated in Germany about potential collaboration between TKMS and Volkswagen on marine propulsion systems, fueling investor optimism about the carmaker’s possible additional investment in Canada.

As Volkswagen expressed clear discomfort over the speculation of its involvement, expectations are rising that Korea’s Hanwha Ocean consortium may have gained an edge over the competition.

Hyundai Motor, which has no production facilities in Canada, has neither confirmed nor denied the possibility of investing in the North American country’s automotive sector.

“We have nothing to say about this issue at the moment,” a Hyundai Motor official said.

However, visits to Canada later this month by senior officials from Hyundai Motor, Hanwha Ocean and the government are bolstering prospects that Korea may secure the order, which would mark the largest single defense export contract in the nation’s history, if successful.

Although Hyundai Motor faces challenges investing in Canada due to U.S. tariffs on cars imported from its northern neighbor, the Korean government and ruling party have signaled their intention to offer incentives to encourage the carmaker’s participation in the submarine project, which has now become a government-to-government initiative.

“The Canadian submarine bid is a key task for the Lee Jae Myung administration as Korea seeks to become one of the world’s four largest defense exporters,” Rep. Kim Byung-joo of the ruling Democratic Party of Korea said Monday at a forum.

“Since this is a pan-government project that could create significant ripple effects across industries and strengthen global security, civilians, the government and the military should work together and do their utmost.”

Prime Minister Kim Min-seok also said last month that he told Canadian Prime Minister Mark Carney, “Your counterpart is not Hanwha but Korea as a whole,” during Carney’s visit last October to Hanwha Ocean’s shipyard on Geoje Island, South Gyeongsang Province.