Rheinmetall is looking at the Volkswagen automobile plant to set up production of infantry fighting vehicles and other armored vehicles.

The company’s CEO Armin Papperger told Reuters that he expects a significant increase in defense procurement in 2025.

Papperger believes that the automotive plant in the German city of Osnabrück is well suited for conversion to military production. In December, Volkswagen, the owner of the plant, announced its intention to reorganize the enterprise or sell it.

The head of Rheinmetall justified the choice by saying that an armored vehicle company needs heavy cranes with the appropriate lifting capacity, which the aforementioned plant has.

The company is in constant communication with Volkswagen through its existing cooperation in the production of military trucks. Papperger clarified that before investing in new locations, significant orders will be needed, for example, for the Lynx infantry fighting vehicle.

“One thing is clear: before I build a new tank plant in Germany, we will certainly look at it,” Papperger said.

If the deal is finalized, this will be the third German enterprise in recent months to be transferred to the military for weapons production. Earlier, Rheinmetall converted two of its own automotive plants to produce defense products.

According to the plans, both plants will be transferred to the ammunition production unit. The company said that these facilities will not perform operations with explosives, but will produce mechanical components. The new facilities will become so-called “hybrid plants” while retaining the ability to produce civilian products.

German defense companies are looking for more capacity as Europe prepares to increase military spending. Companies are hiring valuable workers from the declining automotive industry and other sectors.

For example, in parallel with Rheinmetall, another German defense giant, KNDS Deutschland (formerly KMW), announced the conversion of Alstom’s railcar plant in Goerlitz to armored vehicles.

Having invested tens of millions of euros in re-equipping its facilities, the company plans to start producing armored hulls and other elements required for the production of Leopard 2 tanks, RCH155 artillery systems and Boxer combat vehicles.

Militarnyi previously reported that amid active arms contracting and controversial statements by the US president, shares of European defense companies have risen significantly in price.