Volkswagen is considering expanding its business scope into defense operations. According to the Financial Times, the German automotive giant is in talks with Israeli company Rafael Advanced Defense Systems to repurpose one of its factories. These discussions involve the Osnabrück plant, which is struggling in northwestern Germany, potentially shifting from manufacturing cars to producing components for missile defense systems.
The plant currently employs 2,300 workers, but faces the loss of production for its last model, the T-Roc convertible, in 2027, jeopardizing its economic stability. A source cited by the British financial media stated, “The goal is to save everyone, even to create growth.” They added, “The potential is huge. But it is also up to the workers to individually decide if they want to join this project.”
If the project proceeds, the Osnabrück plant, owned by the German automaker, would begin producing various parts for the Iron Dome (a mobile missile defense system developed by Israel). This includes heavy trucks transporting system missiles, launchers, and electric generators, but not the projectiles themselves. Production could start within 12 to 18 months, subject to approval from employees and local stakeholders.
Another source mentioned by the Financial Times explained that the project would require minimal investment from Volkswagen. They said, “Some money is needed for the transition to new production, but it’s relatively simple.” It’s worth noting that the German car brand already manufactures military trucks through a joint venture between its subsidiary MAN and the German defense company Rheinmetall.
However, this new partnership with Rafael Advanced Defense Systems signifies Volkswagen’s reentry into the defense sector. Historically, the automaker produced military vehicles and the V1 flying bomb for Hitler’s Wehrmacht during World War II.
Volkswagen, like other automakers, has faced declining profitability due to various factors such as reduced demand in key markets, increased production costs in Germany, and significant investments in electric and connected vehicles. Chinese competition and trade tensions have also impacted its financial performance.
If the deal goes through, Volkswagen would be the first automotive company actively involved in defense operations. Other car manufacturers are also considering reinventing themselves. Renault, for example, has announced plans to produce up to 600 aerial drones per month at its site in Le Mans, in partnership with Turgis & Gaillard under the Chorus program led by the French DGA. However, Renault has emphasized that it does not aim to become a major player in the defense industry.
