German automotive giant Mercedes-Benz is reportedly considering entering the defense industry as military spending across Europe continues to rise.
According to Reuters, Mercedes-Benz CEO Ola Källenius said the company is open to participating in defense production if it proves “commercially viable.”
Speaking to The Wall Street Journal, Källenius explained that the world has become “a far more volatile place,” adding that Europe clearly needs to strengthen its defense capabilities. He stated that Mercedes-Benz would be willing to play a positive role if the opportunity aligns with the company’s business interests.
However, Källenius did not specify what kind of military products Mercedes-Benz could potentially manufacture. He emphasized that any defense-related operations would remain a relatively small part of the company compared to its core business of building passenger cars and commercial trucks.
Still, he acknowledged that the defense sector could become a “fast-growing niche” capable of contributing positively to the group’s financial performance.
Pressure On German Automakers
The comments come as Germany continues expanding its military capabilities following the outbreak of the Russia-Ukraine war in February 2022.
German defense companies have already benefited from this shift, with Rheinmetall experiencing major growth in recent years while expanding into naval and military aviation industries.
At the same time, German automakers including Mercedes-Benz and Volkswagen are facing mounting pressure from both U.S. tariffs imposed on European vehicles by President Donald Trump and increasing competition from Chinese manufacturers offering lower-cost vehicles.
A Strategic Direction
A Mercedes-Benz spokesperson later clarified that the company has already been supplying vehicle chassis to specialized firms for years, with those companies adapting and marketing the vehicles independently for military use.
The spokesperson described security and defense activities as a “strategic development area” that Mercedes-Benz intends to continue exploring with its partners.
Meanwhile, Oliver Blume revealed earlier this year that Volkswagen has been in discussions with defense companies, particularly firms involved in missile defense systems, regarding the possibility of converting a German factory to produce military transport equipment.
According to the Financial Times, talks are also ongoing between Volkswagen and Rafael Advanced Defense Systems, the company behind Israel’s Iron Dome system.
Despite the reports, Volkswagen denied having any plans to manufacture weapons directly.
