The European automotive industry appears to be entering a new era of militarization, as reduced demand for passenger cars and the growing need to strengthen European defense drive giants like Mercedes-Benz, Volkswagen, BMW, and Renault into military production projects. According to German and European media, Mercedes-Benz has already secured major military orders, while the leasing of its factories to main battle tank and defense equipment manufacturers is even being considered. At the same time, Volkswagen plans to convert civilian vehicle production plants into military technology units.
German newspaper Bild revealed that Mercedes-Benz will manufacture around 7,000 Zetros military trucks for France, as part of a wider plan to develop military drones and autonomous combat systems. These specific vehicles are expected to function as "mother platforms" for transporting and supporting UAVs. Meanwhile, Daimler Trucks — in which Mercedes-Benz retains a 30% stake — will supply the armies of Germany and Lithuania with hundreds of Arocs 6x6 military trucks. The interest of European armed forces also extends to military models of the G-Class, Unimog, and Sprinter.
A representative for Mercedes-Benz stated that defense and security now constitute a strategic growth sector for the company, although its primary goal remains the production of civilian vehicles. However, the company's CEO, Ola Källenius, openly admitted in an interview with the Wall Street Journal that Mercedes-Benz is ready to enter the defense industry dynamically, provided this proves economically viable. "The world has become more unpredictable and it is clear that Europe must significantly strengthen its defense capabilities," he characteristically stated. These statements come during a period of significant financial pressure for the German automotive industry. Profits for Mercedes-Benz decreased by 17% in the first quarter of 2026, while sales in China — its most important market — collapsed by 27%.
From convertibles to the Iron Dome
A similar shift toward the defense sector is being considered by Volkswagen. Its factory in Osnabrück, where the Volkswagen T-Roc Cabriolet is produced, may be converted into a manufacturing unit for military vehicles and defense systems. According to Automobilwoche, the factory could be sold to Rheinmetall for the production of armored cabins for military vehicles. At the same time, the Financial Times revealed that a partnership with Israel's Rafael Advanced Defense Systems is also being examined for the production of components for the Iron Dome air defense system.
Although Volkswagen officially rules out weapons production, prototype military vehicles based on the Amarok and Crafter have already been presented. The MV.1 and MV.2 models were showcased at the Enforce Tac exhibition in Nuremberg, with capabilities for use as mobile command centers, medical evacuation vehicles, or special operations platforms. The military Amarok features reinforced armor, dual electrical circuits for military equipment, and the capability to transport rapid assault teams.
According to Der Spiegel, the Volkswagen factory in Osnabrück and the Mercedes-Benz factory in Ludwigsfelde may pass under the control of the European tank manufacturer KNDS, which plans investments amounting to 1 billion euros to expand armored vehicle production. "The German automotive industry is in crisis, while the defense industry is experiencing a growth boom. More and more signs indicate that the two sectors will begin to merge," Der Spiegel characteristically reported.
Renault and drones
At the same time, France's Renault officially announced that it is entering the military drone sector, in partnership with the company Turgis Gaillard. The move follows the call by French President Emmanuel Macron for a drastic increase in Europe's military spending. The new reality shows that the European automotive industry is gradually transforming from a producer of civilian vehicles into a fundamental pillar of Europe's new defense industry, during a period of heightened geopolitical tensions and military realignments.
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