The invasion of Ukraine by Russia in February 2022 completely reshuffled the deck of European geopolitics. The era of peace that we have known for more than 80 years is cracking, exacerbated by other conflicts, notably in the Middle East.
Additionally, the arrival of Donald Trump at the White House and his provocations against European interests have sparked a desire to return to sovereignty in defense matters. This atmosphere is leading to a realization for countries in the Old Continent: investments in armament must be increased.
Therefore, over the past ten years, France has doubled the defense budget to reach 413 billion euros by 2026 for the current military programming law. The same goes for Germany, which will spend a total of 524.5 billion euros, including 108.2 billion euros for defense, a record since the end of the Cold War.
In this context of tension and reinvestment in armament, automobile manufacturers are being called upon to contribute to the war effort. They are making a series of announcements, starting with Renault Group, which announced in February 2026 that it could develop a production of 600 drones in less than a year at its Le Mans (72) site, in partnership with Turgis Gaillard. The contract named Chorus aims to manufacture impact-exploding drones. The role of the French manufacturer is primarily to produce the structure, without the military device it contains.
In Germany, the automakers are also stepping up. On the occasion of a congress in Frankfurt on March 27, 2026, Oliver Blume, president of Volkswagen, mentioned “a significant lag to catch up” in terms of defense. Thus, the Wolfsburg group is in talks with “anti-missile defense” companies to convert its Osnabrück plant.
The site in Lower Saxony is set to stop producing vehicles by 2027 as part of the group’s cost-saving plan. The idea is not to produce “weapon systems” but military transport equipment. Volkswagen is reportedly in negotiations with Rafael Advanced Defense Systems, the Israeli company that designed Iron Dome. However, nothing is finalized yet.
On the other hand, Porsche Holding announced an investment of 100 million euros in a defense-dedicated fund, betting on the growth potential of the sector and stating its goal to contribute to Europe’s technological sovereignty. In the United States, the Department of Defense has initiated discussions with American auto giants Ford and General Motors for the production of drones and ammunition. And the list goes on.
Reciprocal Interests
The convergence between the defense and automotive sectors, which is becoming increasingly intimate, is not coincidental. Since the end of the Cold War, the production of military equipment has plummeted as Europeans drastically reduced their defense investments. Countries now prefer lower volumes but with high precision and efficiency. For example, producing a missile by MBDA takes about 18 months and yields 50 units per year.
“The defense industry works on long programs – often 10, 20, or even 30 years – like the Scorpion program with extremely high requirements. And especially, the volumes are not comparable: we are talking about a few hundred or thousand units for a military vehicle, compared to hundreds of thousands in the automotive industry,” explains the Group of French Land and Air Land Defense and Security Industries (Gicat).
Thus, the defense industry resembles more the luxury or craftsmanship industry. This has pushed industrialists in the sector to reduce their industrial capacities, shut down factories, and cut jobs without replacements. Today, these manufacturers struggle to meet the demands of their clients – the states.
Ukrainian Case Pushes Defense Industries towards Volume
The war in Ukraine has illustrated the technological evolution of a conflict between conventional armies. Drones, mainly aerial but also land-based, have played a central role in the conflict. This massive need for small devices has led to a paradigm shift: the necessity to develop “weapons” in large quantities in a short period. Instead of luxury, the focus is now on new technologies.
“Engineers from the Directorate General of Armaments (DGA) explained to me that the French requirements are like those of an army ‘in peacetime.’ This implies that the tools must be used for 40 years with very low maintenance costs,” says Xavier Tytelman, an aeronautics and defense consultant regularly visiting Ukraine.
Currently, the arms industry relies on rare metals and complex processes that can take days. Assembly is often done by hand. “Today, considering the evolution of conflicts, we need to rebuild factories from scratch, with mass requirements. Another option is to use underutilized factories. The automotive sector excels in producing high volumes with high quality. This is a golden opportunity for the defense industry because these factories can quickly adapt,” emphasizes Xavier Tytelman.
In addition to partnerships between companies, there is a real synergy of skills between the two sectors. “The automotive sector brings very efficient production methods, cost management, and lead times, as well as key technologies like sensors, software, or embedded electronics. This can be particularly useful for certain equipment such as vehicles, drones, or some subsystems,” affirms a Gicat spokesperson.
Conversely, defense companies have lost certain industrial skills that are readily available in the automotive sector, especially in metallurgy. “The land defense industry is currently recruiting heavily, with about 10% of positions to be filled. It is attracting more profiles from other industrial sectors, including automotive. In concrete terms, it needs several thousand engineers, especially in areas like cybersecurity, robotics, or embedded systems (drones); specialized technicians, for example in radars or electronic warfare and many skilled workers: welders, machinists, mechanics, boilermakers,” adds Gicat.
A Diversification Strategy for the Automotive Industry?
To overcome the weaknesses related to volumes, the automotive sector seems to tick all the boxes. It perfectly fits the concept of Potential Industrial Defense Tool (POID). “All companies producing machine tools, automobiles, and industrial chains are potential suppliers of components, sub-components, or finished products in the defense sector. In Ukraine, a company that previously produced detection sensors in gardens is now making high proximity detectors for explosives. All companies have a potential dual-use, sometimes unknown to themselves,” says Xavier Tytelman.
In England, for example, people are tasked with listing industrial tools that could be dedicated to the defense industry. Thus, an industrial 3D printer from an aerospace producer operating only at 60% capacity could allocate the remaining 40% to defense, states the consultant.
In this sense, manufacturers are not the only ones attracting defense. Equipment suppliers are also on the front lines. With the automotive sector having left its ‘Golden Thirty,’ reflections are underway to diversify. “The thirty years of growth are over. Today, we are working on the assumption that the global market will no longer grow. We need to find new growth drivers. We are not meant to produce expensive missiles, but to produce high-volume components (1,000 per day, 2,000 per day), explains Christophe Périllat, CEO of Valeo, one of the world’s leading equipment suppliers. “We know how to do extraordinary things, and the defense industry probably needs this know-how, especially to produce drones. So we have signed up for the drone pact and are talking to all drone manufacturers. Did you know that all drone engines in the world are Chinese? Does this not raise questions about sovereignty?” he adds.
The defense interest for the automotive sector is significant. However, is it reciprocated? According to Gicat, defense is not an El Dorado for civilian companies. “Margins are relatively contained, around 9% on average, and the constraints are strong: technical requirements, certifications, sovereignty, sometimes long decision deadlines,” details the Gicat spokesperson.
For the group, the most successful collaborations are those that remain in a simple logic: each party contributes its expertise. The automotive sector contributes to certain industrial and technological elements, while defense retains control over systems, integration, and operational requirements. It is not a shift from one model to another but a “progressive hybridization,” according to the Gicat spokesperson, with more targeted cooperation, more skills bridges, in a context of industrial empowerment in Europe.
“This convergence between the two sectors is not a long-term strategy but more of a short-term tactic. It is an opportunity to please from a public perspective but also to cushion costs. When we have too much industrial capacity compared to what we sell and produce, defense is an alternative to avoid closing sites until the day when the European Commission and Parliament come to their senses to favor industry in the Old Continent. The automotive sector’s involvement should not replace the rise of the defense industry,” states Arnaud Aymé.
Allowing defense industrialists to operate automotive-dedicated factories provides an opportunity to keep sites active until the market recovers.
