German weapons manufacturer Rheinmetall has announced plans to convert a Volkswagen car factory in Osnabrück (Lower Saxony) into a production facility for armoured vehicles.
On March 12, during the presentation of its 2024 results, Rheinmetall CEO Armin Papperger said the plant was well suited to military vehicles manufacturing.
He pointed out the move would require a costly revamp. “We would have to remove most of the interior elements and install heavy-duty cranes but that would not be a hindrance,” Papperger told investors.
Rheinmetall said it would only undertake the necessary investments if it could count on sizeable procurement contracts from the German government.
Papperger added that the German state would have to sign contracts to buy 1,000 armoured vehicles such as the Fuchs or Lynx personnel carriers over 10 years to justify the move.
The VW factory would not be the first plant to switch to defence production.
Previously, tank producer KNDS had announced in February 2025 that it was converting a train carriage factory in Eastern Germany into a production line for tanks.
The Osnabrück car factory belongs to the Volkswagen group, Germany’s biggest automobile manufacturer, and employs about 2,300 people.
VW took over the plant in 2009 after the previous owner, Wilhelm Karmann, became insolvent. The factory mainly assembles the VW T-Roc convertible.
In January 2024, VW announced plans to stop its convertibles production and to shut down the plant. According to the current timeframe, it was due to close in 2027.
Volkswagen and Rheinmetall have a good relationship due to a previous joint venture to produce armoured trucks.
To reach a decision on the Osnabrück plant, the ball was in the court of Germany’s future defence minister, Papperger said. “Then we could be fast,” the CEO continued.
Rheinmetall is Germany’s leading defence manufacturer. It produces military vehicles including battle tanks and howitzers as well as ammunition.
The group also offers electronic solutions and sensors, some of them for civilian use. It has profited greatly from increased military spending in Europe since the Russian invasion of Ukraine in 2022.
On March 12, the company reported stellar results for 2024. Total turnover rose by 36 per cent to €9.75 billion with most of the growth coming from the defence business where sales rose by 50 per cent.
Operating profits rose by 61 per cent to €1.5 billion. The current order backlog increased by 44 per cent to €55 billion, almost six years’ worth of current sales.
Rheinmetall said it expected sustainable sales and profit growth for the 2025 fiscal year.
The company’s share price climbed by around 10 per cent to a new all-time high in reaction to the results.
