German-French tank manufacturer KNDS is reportedly in discussions with Mercedes-Benz regarding the potential acquisition of the company’s plant located in Ludwigsfelde, south of Berlin. This suggestion comes amid a contrasting economic landscape, where the broader German automotive industry faces difficulties while the defense sector continues to thrive. These converging factors are increasing the likelihood of a business collaboration between the two major companies.
The defense conglomerate, which originated from a merger between Krauss-Maffei Wegmann and France’s Nexter, plans significant investment totaling one billion euros over the next few years. This capital expenditure is designed to meet the escalating demand from European armies for armored fighting vehicles and military transport. In a prior move, KNDS even took over the Alstom plant in Görlitz, which was originally threatened with closure.
Current defense needs are high; for instance, the German armed forces (Bundeswehr) are rumored to place an order for up to 3,000 Boxer armored vehicles, which KNDS and Rheinmetall are scheduled to produce in various configurations. Although KNDS has expanded its production capacity in Munich-enough to build up to ten Boxers per month-this figure falls short of the anticipated large-scale orders.
Meanwhile, Mercedes-Benz’s operations in Ludwigsfelde primarily focus on producing “open prototypes” particularly chassis for the Sprinter van. However, the production of the Sprinter itself is expected to move to Jawor, Poland, by 2030, signaling the eventual end of manufacturing at the Ludwigsfelde site.
According to reports, KNDS is now talking with Mercedes about acquiring both the facility and a portion of its approximately 2,000 employees. There is also speculation that before a full takeover, the companies might initially opt to rent a part of the plant, allowing them to simultaneously produce military vehicles for KNDS and vans for Mercedes. Nevertheless, a definitive resolution regarding the site’s future has not yet been announced.
In parallel, KNDS is also investigating the possibility of taking over the VW works in Osnabrück. The Wolfssburg facility would welcome the transfer of operations due to underutilization, though Rheinmetall had previously shown interest but declined. Mercedes-Benz declined to comment on the ongoing talks with KNDS, while VW stated that it is evaluating “viable prospects” for Osnabrück after the current production runs conclude in 2027, and that it is exchanging information on “various options” with different market players. KNDS confirmed that it is currently discussing potential capacity acquisitions with several companies.