The tank design benefited from design assistance and transfer of technology by Hyundai Rotem. In order to improve the current technical capabilities of the Turkish defense industries and increase the amount of domestic contribution towards national defense, the Undersecreteriat for Defense Industries decided that a "National Tank" will serve as a catalyst for uniting certain Turkish defense companies around a common goal and for providing the Turkish military with extra firepower in the form of a modern tank. The National Tank Production Project (Turkish: MİTÜP – Milli Tank Üretimi Projesi) was an initiative developed in the mid-1990s to establish independent and robust infrastructure for the production, development and maintenance of main battle tanks used by the Turkish Armed Forces. The first mass production of Altay will be combined with MKE made 55 calibre 120 mm main gun, Roketsan made advanced armor package along with Aselsan made active protection system, and HD Hyundai Infracore engine and SNT Dynamics transmission. With a unit cost of 13.75 million dollars, the tank design cost is on par with and competitive when compared with relative projects. It is named in honor of Army General Fahrettin Altay who commanded the 5th Cavalry Corps in the final stage of the Turkish War of Independence.
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