Germany’s Rheinmetall turns automotive plants into defence powerhouses

Proceeding from a new article, Defense Express features that as Germany’s automotive sector grapples with a deepening crisis, defense giant Rheinmetall is shifting gears—literally. 

Rheinmetall, the German defence and automotive giant, has announced plans to repurpose two of its plants, which are currently manufacturing automotive components, in response to the ongoing crisis in Germany's automotive sector. The two plants, located in Berlin and Neuss, will undergo partial reconfiguration to produce unspecified weapons and ammunition while continuing car parts production. The company has not disclosed the expected investment or the timeline for the conversion.

Rheinmetall’s press service explained that the reconfigured plants will leverage the company’s industrial strength as a major military equipment supplier and the high demand from both German and global customers. Notably, the facilities will not handle explosives but will focus on producing protection and mechanical components for military use.

Defence experts, such as those at Defense Express, interpret this shift as Rheinmetall’s strategy to increase its capacity to meet growing demand for defence orders from the Bundeswehr (the German Armed Forces) and for military aid to Ukraine. At the same time, the company appears to be maintaining its automotive production lines, perhaps in preparation for an eventual rebound in Germany’s struggling automotive industry.

The shift in focus comes amid impressive financial performance in Rheinmetall’s weapons division. The company's operating profit in its defence sector nearly doubled, reaching 339 million euros in the first nine months of 2024. In contrast, its automotive business saw a 3.8 per cent decline, falling to 74 million euros.

Since 2022, European nations have collectively invested over 200 billion euros in military equipment and weapons. However, only 20 per cent —about 40 billion euros—has been allocated to European defence firms, according to reports. With rising defence spending under new US President, Donald Trump, European defence manufacturers, including Rheinmetall, are poised to see a significant increase in orders for specialized military equipment.

Rheinmetall’s decision to repurpose its automotive production capacity is part of a broader trend across Europe, where more manufacturers are converting civilian factories into arms production facilities. Defense Express highlights the example of German holding company KNDS, which recently acquired a historic railcar plant in Görlitz. The plant will be retooled to produce components for military vehicles, such as the RCH 155 and Leopard 2.

As European defence spending surges, it seems that the lines between the automotive and defense sectors are increasingly blurred. For Rheinmetall, this strategic shift may ensure a steady stream of revenue from both military contracts and, hopefully, a future recovery in the automotive market.

By Naila Huseynova