Germany's Mercedes Benz mulls diversification into defence

"“The world has become more unpredictable, and I think it is quite clear that Europe needs to strengthen its defence capabilities,” CEO Ola Kaellenius said in an interview with The Wall Street Journal published Friday. “If we are able to play a positive role in this area, we would be ready to do so,” said Kaellenius, a German-Swedish national."

"“Our activities in the security and defence sector constitute a strategic development focus that we will continue to actively pursue, in collaboration with our partners,” the spokesperson added. “has for many years been supplying chassis to specialised firms which equip and market them under their own responsibility and under their own brand for military applications”."

"His remarks come amid Germany beefing up its military capacity in response to Russia's invasion of Ukraine in February 2022. The German defence industry has locked onto that trend, as illustrated by the rise of arms maker Rheinmetall in recent years, with the group recently pushing into the naval and dronemaking spheres."

"In late March, the CEO of fellow German auto giant, Volkswagen, Oliver Blume, said he was “in contact” with defence companies, particularly those involved in missile defence, to convert a German factory to produce military transport equipment. According to the Financial Times, discussions are under way with Rafael Advanced Defense Systems, the company that designed Israel's Iron Dome."

Europe’s defence needs are increasing amid a more unpredictable world. Mercedes-Benz CEO Ola Kaellenius said he has not ruled out entering the defence industry and suggested the company could play a positive role. Germany has been strengthening military capacity since Russia’s invasion of Ukraine in February 2022, and defence firms have expanded, including moves into naval and drone-related areas. German automakers face economic pressure from tariffs and competition from China, while some leaders have explored defence-related production. Volkswagen has discussed converting a factory for military transport equipment and has been in contact with missile defence companies. Mercedes-Benz states it already supplies chassis for military applications and continues pursuing security and defence activities with partners.

Read at The Local Germany