Could Mercedes-Benz move towards the defence sector as well as car and Formula 1 racing in the future? According to CEO Ola Källenius’, at least the idea is not off the table.
In an interview with The Wall Street Journal’a, the Mercedes-Benz chief said the company would be open to supporting Europe’'s growing defense efforts.
Källenius, “The world has become more unpredictable, and I think it's pretty clear that Europe needs to strengthen ’'s defensive capabilities, ” said. "If we can play a positive role in this, we will be ready to do it." - “
Källenius did not outline any concrete plans. But he stressed that any potential defence-related business would remain a small complementary activity compared to Mercedes-Benz’'s core automotive operations.
The company has not yet released an official statement on possible projects.
Guns instead of cars?
Mercedes-Benz is not the first car manufacturer to consider a potential future role in the defence industry.
Volkswagen is also exploring possible opportunities linked to defence production. CEO Oliver Blume said the company plans to decide later this year whether military transport vehicles can be manufactured at the Volkswagen’in factory in Osnabrück’. Blume also emphasized that the Volkswagen’ will not produce weapons or tanks.
Meanwhile, defense companies are increasingly turning to the struggling automotive sector. Rheinmetall, Neuss and Berlin said they were investigating whether some of the existing automotive supplier facilities in ’ could be converted into defense production.
The company is also reportedly considering taking over entire factories from automakers facing economic pressure. Among the facilities under discussion is the Volkswagen’in Osnabrück plant, whose long-term future remains uncertain.
But Armin Papperger, CEO of Rheinmetall, has been cautious so far, stating that existing automotive plants are only partially suitable for defense production and conversions will be expensive. Still, he said, such options should be considered before completely new facilities are built.
Other defense firms are also benefiting from the decline in Germany's ’'s automotive industry. Aerospace and defense company Hensoldt is actively recruiting skilled employees from suppliers such as Continental AG and Bosch.
Rising defense industry
Germany’'s automotive industry is under increasing pressure. High production costs, weak demand across Europe, increased competition from China’, and U.S. tariff threats from ’ place a heavy burden on manufacturers.
In February, Mercedes-Benz reported a profit of around €5.3 billion from €10.4 billion in 2025’te %He reported that he had fallen by 49 percent, while his income had fallen by about nine percent.
All major German automakers, except BMW, have announced layoffs at their domestic factories in recent months.
While the automotive industry is struggling, the defense industry is growing. According to Stockholm-based peace research institute SIPRI’, the world's 100 largest arms manufacturers reached record revenues in 2024’.
Analysts, however, question whether the defense sector can realistically offset the decline in the automotive industry. The scale of the two sectors remains quite different: Germany’'s automotive sector generated revenues of more than 540 billion Euro’ in 2024 alone.
By comparison, the country's five largest defense companies, 2023’te, generated total revenues of just under 30 billion Euro’.
