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Rheinmetall Could Shift Automotive Production to Military Manufacturing in Response to Growing Defense Demand.
In response to rising defense spending, the German company Rheinmetall is considering shifting the production of two of its automotive factories in Germany to military manufacturing. This reorganization comes amid a slowdown in the automotive industry, with the company seeking to capitalize on the increased demand for military equipment, particularly due to the ongoing war in Ukraine.
Rheinmetall is considering shifting the production of two of its automotive factories in Germany to military manufacturing. (Picture source: Rheinmetall)
The Rheinmetall facilities in Berlin and Neuss have faced challenges due to the global downturn in the automotive sector. However, the company plans to integrate these factories into its Weapons and Ammunition division, while maintaining some automotive production capacity. According to Rheinmetall, this shift will allow the plants to benefit from the industrial strength of the Rheinmetall Group, a major supplier of military equipment, and to meet the growing demand both in Germany and internationally.
Earlier this month, Rheinmetall won a €26 million contract with an Asian automotive manufacturer for the supply of its high-voltage coolant pump. This pump is intended for use in 800V hydrogen fuel cell architectures for small vans, trucks, and stationary power plants. Production of this product will begin in 2027 at Rheinmetall’s Hartha plant and continue until 2031.
Rheinmetall is also active in the defense sector and expanding its influence internationally. In October 2023, the company established the joint venture Rheinmetall Ukrainian Defence Industry with a state-owned Ukrainian company. This collaboration led to the opening of a maintenance center in western Ukraine in June 2024, supporting the continued shipment of Marder and Lynx infantry fighting vehicles to Ukraine.
In the United States, Rheinmetall is also restructuring its automotive division, consolidating its operations under the name American Rheinmetall. Through this reorganization, American Rheinmetall Vehicles is merging with Loc Performance to streamline its work in System Prime, Tier 1 components, and commercial projects under a unified name.
Rheinmetall Electronics UK, which has been part of the Rheinmetall Group since 2009, continues to play a key role in major modernization programs for the British Army, including the Boxer vehicle and Challenger 3 tank programs.
This strategic shift marks a significant turning point for Rheinmetall as it adapts its production capabilities to meet the growing demand for defense equipment, in line with the current geopolitical situation and the increase in military investments.