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OTTAWA — South Korean defence manufacturer Hanwha says it’s ready to build military vehicles in Canada in a partnership with the domestic auto sector, including mobile howitzers, rocket launch systems and infantry vehicles.
But that’s only if it wins its bid to construct the Royal Canadian Navy’s next fleet of submarines.
Hanwha said Wednesday it would forge a joint venture with the Automotive Parts Manufacturers’ Association to create a Canadian entity that would build a range of vehicles.
“It’s not a secret Canada asked … ‘Could you please take a look at the auto industry and understand what you can do?’ They’re under a tremendous amount of stress,” said Glenn Copeland, CEO of Hanwha Defence Canada.
“We’ve always wanted to propose something along the lines of land vehicle systems, and so it was just a natural fit.”
The war machines would be built with Canadian labour, parts and materials, including steel and aluminum. Hanwha said the joint venture could both supply the Canadian Armed Forces and export to allies.
Canada is planning to buy a fleet of up to 12 conventionally powered submarines — a massive procurement project worth billions. The winning bidder could be announced as early as this year.
Flavio Volpe, head of the Automotive Parts Manufacturers’ Association, said Hanwha reached out about four months ago and invested a lot of time in learning about the capabilities of Canadian automotive suppliers.
The automotive sector is one of the primary targets of a U.S. tariff war that has dragged on for more than a year now.
Volpe, whose industry trade group represents hundreds of parts suppliers, said auto assembly in Canada has dropped by about a third since U.S. President Donald Trump started his trade war. He said the automotive industry is notoriously difficult to diversify.
While demand for military vehicles is unlikely to ever reach the level of demand for passenger vehicles, he said, defence contracts are highly coveted.
“The value of (defence auto part) contracts, the certainty of the jobs that come with those contracts, the maintenance, repair and overhaul 20- and 30-year carry contracts are the types of business diversification that this industry desperately needs,” Volpe said.
The proposed joint venture would have Canadian majority ownership and board membership — although it’s not clear yet exactly how the agreement would work in practice, since a lot depends on the success of Hanwha’s bid.
“It might be that the best move is to set up a new plant,” Volpe said. “But it also might be that one or more of the major Canadian automotive suppliers, like a Martinrea or a Linamar, could do that assembly in one of their plants and act as the assembler for all the other sub-component suppliers.
“You have to do the business case on each vehicle.”
The military vehicles that would be produced by the proposed joint venture would include Hanwha’s K9 Thunder howitzer, the K10 ammunition resupply vehicle, the Redback infantry vehicle, the Chunmoo rocket launcher and ground drone vehicles.
The joint announcement on Wednesday was made in Vaughan, Ont., at a Martinrea facility.
Wednesday was also the government’s deadline for the submarine makers to amend their bids.
Ottawa gave the two rival bidders — Hanwha and Germany’s TKMS — extra time to sweeten their offers in the hope they would sign more partnerships with Canadian companies.
“I think it certainly is what the government’s been asking for. We got the message,” Copeland said.
“We’re really trying to hit the home run for Canada and give them what they’ve been asking for and allow them to basically say, hey, our new strategy is successful and here’s living proof.”
Defence Investment Agency CEO Doug Guzman told a House of Commons committee on Monday that Ottawa told the prospective sub suppliers to take another three weeks and “think hard about whether you have more to put on the table.”
He also noted that the bulk of the contract’s value will be for long-term servicing and support for the vessels, so the process focused on ensuring Canadian content is part of in-service support.
Industry Minister Mélanie Joly has said Canada is looking to attract automotive investments in Canada through the massive submarine procurement project — and was originally seeking a full auto manufacturing plant.
“Fundamentally what we want, also, is a car plant, and that is why we’re talking also with the Germans and the Koreans — because we think we can attract more investments in the auto sector through leveraging defence investments,” Joly told a Toronto business crowd on Feb. 19.
Joly declined to comment last week when The Canadian Press asked about the bid extension because she is responsible for assessing industrial benefits from the two offers.
TKMS spokesperson Nils Beyer said his firm did not want to comment on aspects of the bids while the government is assessing them, but said the strength of their overall strategy is the “depth of government-backed engagement” supporting it.
“This includes initiatives such as targeted investment mechanisms (including areas like raw materials), support for strategic infrastructure, financial frameworks that enable long-term delivery, and alignment across broader defence and industrial programs,” he said in an email.
TKMS’ bid is supported by the governments of Germany and Norway, which are selling it to Canadian officials as more of a partnership with NATO allies.
The longtime sub maker has also sought to include Canadian companies in its supply chain and prospective bid. Beyer pointed to TKMS forging partnerships with Bombardier and Lockheed Martin Canada.
Secretary of State for Defence Procurement Stephen Fuhr said Hanwha’s latest offer on Wednesday shows the government’s strategy for the submarine procurement is working, since the companies got the message that the winning bidder would be the one offering to deliver the most economic value for Canada.
“They’re great companies and because there’s only two, they have a 50 per cent chance of winning this and they know what the stakes are,” Fuhr told reporters on Parliament Hill on Wednesday.
“So guess what? They’re putting their best foot forward and we’re happy to see that.”
The federal government is looking to have its first new submarine in the water by 2032.
This report by The Canadian Press was first published April 29, 2026.
Kyle Duggan, The Canadian Press
