Mercedes-Benz Considers Defense Production as EU Military Spending Rises
Mercedes-Benz's CEO, Ola Kallenius, indicates potential involvement in defense production, contingent on business viability. This comes amid increasing military expenditures across Germany and the EU, highlighting manufacturers' search for alternative revenue streams amid economic challenges.
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Mercedes-Benz is open to exploring defense production if it aligns with business interests, according to CEO Ola Kallenius. Historically, the company produced military hardware during World War II, supplying the Nazi regime.
Current industry dynamics, including a 57% profit decline reported in February 2025, prompt the company to consider defense contracts as a potential revenue source. Defense spending has surged in Germany and EU nations, driven by calls for increased military capability and reduced reliance on US supplies.
This trend coincides with the German armed forces' €100 billion military modernization plan initiated in 2022, resulting in thousands of procurement contracts signed. A growing defense niche may provide financial relief for car manufacturers facing competitive pressures.
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