The German industrial engine is changing direction. Traditional car companies such as Volkswagen, Mercedes-Benz and Porsche are facing drastic declines in profits and the longest stagnation since the end of the Second World War. In an effort to save thousands of jobs, the giants of the auto industry are increasingly focusing on military production.
The German automotive industry is shifting its focus from making cars and auto parts to making weapons. The reason is the falling demand and the wave of arming Europe. TASR informs about it based on the report of the TASS agency, which referred to The Wall Street Journal (WSJ).
- The German automotive industry is moving capacities from car production to armaments.
- German industry has been stagnating for a long time and thousands of jobs are being lost every month.
- The profit of Mercedes Volkswagen and Porsche fell dramatically due to weak demand.
- Volkswagen and Schaeffler are involved in the production of anti-aircraft systems, drones and military equipment.
- Germany became the fourth largest arms exporter.
A stagnant industry
German industry is experiencing the longest period of stagnation since World War II. About 15,000 jobs are being lost every month, including in the automotive sector, the WSJ wrote on Monday. Last year, the Mercedes-Benz and Volkswagen groups recorded a decrease in profit by 49 percent, respectively. 44 percent.
Porsche’s operating profit fell by as much as 98%. In this situation, Volkswagen is negotiating with Israeli partners on the production of components for the Iron Dome air defense system, the American newspaper further stated. German auto parts maker Schaeffler has started producing engines for drones, on-board systems for armored vehicles and components for military aircraft.
The fourth largest arms exporter in the world
These changes are driven by government defense contracts with a total value of up to one trillion euros. Almost 90 percent of European defense investments go to German companies, the WSJ pointed out. Between 2021 and 2025, Germany will overtake China to become the world’s fourth largest arms exporter, with a share of 5.7 percent, according to data from the Stockholm International Peace Research Institute (SIPRI). Almost a quarter of German arms exports between 2021 and 2025 went to Ukraine, another 17 percent were exported to other European countries.
In recent years, the Bavarian metropolis of Munich has become the center of the German defense industry.
