Otokar and Automecanica S.A form JV for Romanian Cobra II

Türkiye’s Otokar has formed a joint venture (JV) with Rheinmetall Automecanica S.A in order to build around 800 Cobra II armoured 4x4s in Romania, according to a 25th April Otokar press release. The two companies are equal partners in the JV with a 50% holding each, although Otokar is significantly supporting the establishment of the JV’s new factory in Mediaș, Romania. 

The first 278 vehicles of 1,059 vehicles ordered will be produced by Otokar in Turkiye, with production of the remainder eventually transferring to Automecanica S.A. The first Romanian prototype is expected to be produced by July this year, which shows how quickly the venture has moved since the Cobra II was selected in November 2024. Full rate production at the Romanian factory is scheduled to be underway by the end of 2025, averaging an output of 1.5 vehicles per day, the news outlet Romanian Defense has reported. 

The Cobra II contract was valued at approximately €855.8 million (£726.7 million/$974.6 million), and under the terms of the contract, the first deliveries of completed vehicles are to be made in the fourth quarter of 2025 with all deliveries completed by the end of 2030. 

Romania ordered the Cobra II in 2024 following a set of tests and trials. However, industry reports and sources have indicated that the offset requirements were challenging and other competitors decided not to proceed. It has since become clear that Otokar is playing a significant role in establishing the factory in Mediaș, including the purchase of machine tools and training of staff. This is not unusual for large programmes, but it may have meant reduced profit margins or extensive technology transfer for the contract which deterred other bidders. 

For Otokar, it may be that this is an important step for future plans, potentially justifying the move: “This step will be one of the main milestones in Otokar’s growth strategy in [the] defence industry, contributing to our company’s expansion in global markets,” Otokar CEO, Aykut Özüner said. The facility is also expected to become a strategic hub for Otokar’s European operations, according to Otokar Military Cluster Head, Sedef Vehbi. 

The company has also secured an order for 130 of its Arma 6×6 armoured fighting vehicles from Estonia, which are now being delivered. Cobra IIs have also been supplied to Ukraine, and were seen transiting through Romania in 2023. 

It is also worth noting that Rheinmetall acquired a 72.5% stake in Automecanica S.A in 2024 as it anticipated large orders that could be met by the company’s production facilities. It also saw the company as being well-placed to support logistics and sustainment in Ukraine and for NATO’s eastern flank. 

Calibre comment

Romania is conducting an extensive modernisation of its armed forces with expanded procurement of the Piranha 5, which is manufactured locally, as well as 54 M1A2 Abrams, F-35s, additional Patriot systems, and Switchblade loitering munitions. Altogether, the country is expecting to spend as much as 2.5% of its GDP on defence in 2025, a 0.3% rise over 2024, and could reach 3% in the next two years, according to president Ilie Bolojan. However, Romania’s government debt is significant, having reached 48.8% of its GDP in 2023. This is further compounded by the largest budget deficit in Europe, which reached 8.7% of GDP in 2024, although the government target for 2025 is to reduce the deficit to 7%. Moreover, Romania has faced a period of significant political instability and is due to undergo presidential elections in May, which could potentially lead to greater financial reforms to control government spending. Overall, it is encouraging to see a country so close to Ukraine trying to extensively modernise its armed forces, but intergovernmental focus and patience will be necessary to fully realise the country’s ambitions.

By Sam Cranny-Evans, published on 29th April, 2025.