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Along with vehicles and F1 racing, might Mercedes-Benz develop into the protection subject sooner or later? In line with CEO Ola Källenius, the concept is a minimum of not far-fetched.
In an interview with the Wall Avenue Journal, Mercedes-Benz’s high executives mentioned the corporate is open to supporting Europe’s rising protection efforts.
“The world is changing into an increasing number of unpredictable, and I feel it is clear that Europe must strengthen its protection capabilities,” Källenius mentioned. “If we are able to play an energetic function in that, we’re keen to take action.”
Källenius didn’t define particular plans. Nevertheless, he pressured that any potential protection enterprise would stay a small, complementary exercise in comparison with Mercedes-Benz’s core automotive enterprise.
The corporate has not but made an official assertion in regards to the potential venture.
Weapons as an alternative of vehicles?
Mercedes-Benz isn’t the primary automaker to think about a future function in protection.
Volkswagen can be exploring potential alternatives associated to protection manufacturing. Volkswagen will determine later this yr whether or not its Osnabrück plant can produce navy transport autos, CEO Oliver Blume mentioned. On the identical time, Blume emphasised that Volkswagen doesn’t manufacture weapons or tanks.
In the meantime, protection corporations are more and more turning to the struggling auto sector. Rheinmetall mentioned it’s contemplating changing a few of its present automotive provider websites in Neuss and Berlin for protection manufacturing.
The corporate can be reportedly contemplating shopping for whole factories from automakers going through financial strain. Among the many websites being mentioned is Volkswagen’s Osnabrück plant, whose long-term future stays unsure.
However Rheinmetall CEO Armin Pappelger has to this point struck a cautious tone, noting that present automobile factories are solely partially appropriate for protection manufacturing and that changing them could be pricey. Nonetheless, he mentioned such choices have to be evaluated earlier than constructing a wholly new facility.
Different protection corporations are additionally benefiting from the downturn in Germany’s auto trade. Aerospace and protection firm Hensoldt is actively recruiting expert staff from suppliers resembling Continental AG and Bosch.
Quickly rising protection trade
Germany’s automobile trade is beneath rising strain. Excessive manufacturing prices, weak demand throughout Europe, rising competitors from China and the continued risk of tariffs from the USA are weighing on manufacturing.
Mercedes-Benz reported in February that its 2025 revenue fell by about 49%, from 10.4 billion euros to five.3 billion euros, and gross sales fell by about 9%.
All main German automakers, excluding BMW, have introduced job cuts at home areas in current months.
Whereas the auto sector is struggling, the protection trade is booming. The world’s 100 largest arms producers will attain file income in 2024, in response to the Stockholm-based peace analysis institute SIPRI.
Nonetheless, analysts query whether or not the protection sector can realistically offset the decline within the auto trade. The 2 industries stay vastly totally different in dimension. Germany’s automotive sector generated revenues of over 540 billion euros in 2024 alone.
By comparability, the nation’s 5 largest protection corporations had mixed gross sales of slightly below 30 billion euros in 2023.
