The execution of Türkiye's largest armored vehicle export contract has encountered setbacks, resulting in financial penalties for the manufacturer. Otokar, which is supplying Cobra II armored vehicles to Romania, has confirmed delays and unmet milestones related to the localization of production, triggering compensation payments to the Romanian side.
According to disclosures cited by SavunmaSanayiST, Otokar has paid 1.88 billion Turkish lira (approximately $37.4 million) to Romania's state defense procurement company Romtehnica for failing to meet interim targets linked to establishing localized production of Cobra II vehicles in Romania. In addition, the delivery of the first batch of 194 vehicles was delayed, resulting in a further penalty of 72 million Turkish lira (around €1.41 million), which is scheduled to be settled this month.
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In practice, no direct transfer of funds is expected. Otokar is compensating the delays voluntarily and without court proceedings by offsetting the penalties against mutual financial obligations with the customer. As a result, Romania effectively receives a discount on the overall contract value, rather than a separate monetary payment.
The contract, signed in November 2024, covers the delivery of 1,059 Cobra II armored vehicles. Under its terms, 278 vehicles are to be produced in Türkiye, while 781 are to be assembled in Romania as part of the localization effort. The total contract value was set at €857 million excluding VAT, implying a unit cost of approximately €809,000 per vehicle.
Following the applied penalties, the deal has become cheaper for Bucharest by nearly €49 million, or about 5.7% of the original contract value. Despite the delays, Otokar has stated that it remains committed to overcoming the difficulties and fully meeting its contractual obligations.
The Turkish company has not publicly disclosed the precise reasons for the delays. However, one potential factor lies in the original Romanian requirements for the competition. Romania's Ministry of Defense reportedly stipulated a maximum vehicle weight of 10,580 kg, while Cobra II system's declared combat weight ranges between 13.5 and 14.5 tonnes.
This discrepancy suggests that Otokar either needed to develop a lighter variant of the vehicle specifically for Romania or that Romanian authorities ultimately agreed to accept the standard configuration. Either option could have contributed to technical and industrial challenges during the early stages of the program.
The Cobra II system remains a widely used armored vehicle, currently operated by more than ten countries worldwide. Notably, it is also in service with the Armed Forces of Ukraine, underscoring its established role in contemporary military operations despite the contractual difficulties surrounding this high-profile export deal.
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