STUTTGART (dpa-AFX) - Mercedes-Benz CEO Ola Källenius is open to expanding the carmaker's defense operations, provided such a move is 'economically viable,' according to comments made to the 'Wall Street Journal.' 'The world has become more unpredictable, and I think it is absolutely clear that Europe needs to strengthen its defense profile,' he stated. 'Should we be able to play a positive role in that, we would be prepared to do so.'
According to Källenius, Mercedes' strengths as a high-volume manufacturer could help the company engage more directly in the military equipment sector. 'What automakers do exceptionally well - and we are good at it - is manufacturing high-quality precision machinery in larger volumes,' he told the 'Wall Street Journal.'
Källenius predicted that defense would likely remain a small fraction of the business compared to passenger car and van production. However, 'it could be a growing niche that could also contribute to our bottom line,' he said. 'So, we will see.'
Mercedes-Benz cites strategic development field
When questioned, Mercedes-Benz emphasized that the company primarily develops and produces civilian vehicles. However, activities in the security and defense sector represent a strategic development field that is being actively shaped in cooperation with partners.
'With modifiable vehicles for security and defense operations, we have been strengthening the defense and security policies of Europe and NATO for decades - while simultaneously securing the future viability and jobs at our locations,' the company stated. For many years, chassis have also been supplied to specialized firms 'which outfit and market them for military applications under their own responsibility and brand.'
Automakers and suppliers weigh market entry
The German automotive industry is showing growing interest in the defense sector amid rising military spending. Both carmakers and suppliers are either evaluating or already planning an entry into the market. The sales slump in the German auto sector and the transition to electromobility are weighing on many companies, while the defense industry is recording strong growth and expanding due to international conflicts.
According to experts, the struggling auto supply industry sees opportunities in defense, particularly in the production of body parts, powertrain components, and vehicle assistance systems. This represents a broader industry trend where manufacturers and suppliers are considering the defense sector as a potential diversification strategy./sl/DP/mis
