Otokar, a major player in the Turkish defense industry, is responding to delivery delays and penalties incurred in Romania's largest ever armored vehicle tender (worth €857 million) with a radical solution. Having paid approximately 2 billion TL in compensation due to disruptions in the production schedule in the past, the company has decided to acquire its Romanian production partner, Automecanica, to resolve the issue definitively. With this move, Otokar aims to eliminate production risks in Europe by ending the partnership mandated by contracts and taking complete control.
The project to produce 1059 COBRA II armored vehicles for the Romanian Ministry of National Defence is transforming into a strategic investment after a difficult period. As a reminder, Otokar announced in a statement to the Public Disclosure Platform (KAP) a few months ago that it had paid approximately 192 million Romanian Lei (approximately 2 billion TL) in compensation/penalties to Romanian authorities due to delays in the delivery and production schedule.
As the process continued, Otokar management switched from a local partnership model to an ownership model to avoid jeopardizing the project and to ensure the smooth fulfillment of the local production requirement (781 vehicles). The company signed a memorandum of understanding to acquire 96.77% of the shares of its Romanian partner, Automecanica.
Otokar Takes the Wheel in Romania
Industry experts interpret this acquisition as Otokar's move to take control of the project. Otokar, which has had to bear the cost of potential disruptions in capacity or process management by its local partner, aims to increase production speed, eliminate risks, and avoid potential future penalties by purchasing the factory.
Although the announcement to the Public Disclosure Platform (KAP) stated that legal proceedings have been initiated to overturn the penalties, Otokar is resolving the issue on the ground with this acquisition without waiting for the court's decision.
Strategic Investment of 85 Million Euros
According to Anadolu Agency (AA) data, Otokar's projected value for Automecanica shares is approximately 85 million Euros. If the acquisition is completed by the end of April, Otokar will not only secure the Romanian tender but also gain its own production base in the heart of Europe, owning a facility with an 85-year history.
This move marks one of the rare examples in the Turkish defense industry where a company has turned a crisis it faced in the country it exports to into an opportunity by acquiring a factory.
The Anatomy of Otokar's Romanian Tender: A Record-Breaking 1059 Vehicles and €857 Million.
This massive project, which holds the distinction of being the largest single-item land vehicle export contract in the history of the Turkish defense industry, was initiated by Romtehnica, a company of the Romanian Ministry of National Defence. The tender, worth a total of 857 million Euros (approximately 30 billion TL), covers the supply of 1059 4x4 Tactical Wheeled Light Armored Vehicles. According to the tender specifications, which Otokar won with its world-renowned COBRA II platform, the first batch of vehicles is to be exported from Türkiye, while the remaining 781 main bodies are to be manufactured in Romania through technology transfer.
