Ola Kallenius
The head of Mercedes-Benz, Ola Kallenius, stated his readiness to participate in the development of the European defense sector. In an interview with The Wall Street Journal, he noted that Europe is forced to strengthen its own defense capabilities due to growing instability in the world.
According to Kallenius, the company is ready to consider participation in defense projects if it can make a “positive contribution.” At the same time, there is no question of a radical change in the business profile: the production of civilian cars will remain Mercedes’ core business.
A few years ago, such statements from luxury car manufacturers seemed impossible. However, the situation in the European industry is changing rapidly. Weakening demand, high energy costs, competition from Chinese brands and trade risks in relations with the US are forcing car companies to look for new markets.
Military orders are becoming more attractive
Following Mercedes, Volkswagen is also studying the possibilities of cooperation with the defense industry. The concern’s management is considering the option of producing military vehicles at the Osnabrück plant, the future of which remains uncertain. At the same time, the company emphasizes that it does not plan to produce weapons or tanks.
At the same time, defense concerns themselves are beginning to use the infrastructure of the automotive industry. Rheinmetall is studying the possibility of re-equipping auto component plants for the production of military products. In addition, the company does not rule out the purchase of individual automobile companies.
Other players in the defense market are also benefiting from the crisis in the automotive industry. Hensoldt is actively hiring engineers and technicians previously employed by Bosch and Continental AG.
The automotive crisis is changing the industrial map of Germany
The German auto industry is going through one of the most difficult periods in decades. Mercedes-Benz has reported a drop in profits by almost 50% to 5.3 billion euros by the end of 2025. Most major manufacturers have already announced job cuts and revised production programs.
Against this background, the European defense industry, on the contrary, is demonstrating rapid growth. Increased military spending in NATO countries and large-scale rearmament programs are creating new opportunities for companies.
However, experts doubt that the defense sector can fully replace the automotive industry. Even in crisis conditions, the German automotive industry remains one of the largest sectors of the country’s economy: its total turnover in 2024 exceeded 540 billion euros.
