The Franco-German armored vehicle manufacturer KNDS is reportedly negotiating with Mercedes-Benz regarding the potential acquisition of Mercedes-Benz’s facility in Ludwigsfelde, located south of Berlin. While the German automotive industry is undergoing difficulties, the defense sector remains booming. Recent developments suggest that cooperation between the two companies may be likely.
The defense group, which was formed through a merger of Krauss-Maffei Wegmann and the French company Nexter, plans to invest one billion euros in the coming years. This investment is intended to expand capacity and meet the growing demand from European armies for tanks and military vehicles. In a previous year, KNDS had successfully acquired the threatened Alstom plant in Görlitz.
In the coming months, a major order is anticipated from the German armed forces (Bundeswehr) for up to 3,000 units of the Boxer wheeled armored vehicle, which is produced in various versions by both KNDS and Rheinmetall. While KNDS has expanded its production in Munich to a capacity of up to ten Boxer vehicles per month, this amount falls short of meeting the expectations of the major order.
In Ludwigsfelde, Mercedes-Benz currently manufactures its “open prototypes” particularly chassis for the Sprinter transporter. However, the Sprinter is expected to be produced in Poland’s Jaworzno starting around 2030, meaning the production in Ludwigsfelde will eventually cease.
Consequently, Mercedes is allegedly in talks with KNDS about the possible transfer of the facility and a portion of its approximately 2,000 employees. Discussions are reportedly also examining the option of initially leasing part of the plant before a complete takeover. This arrangement would allow both KNDS to produce military vehicles and Mercedes-Benz to continue producing vans simultaneously. However, a final decision regarding the site’s future has not yet been made.
Separately, KNDS is assessing the possibility of taking over the VW factory in Osnabrück. The Wolfsburg-based company had expressed a willingness to hand over the plant due to insufficient utilization. Rheinmetall had shown interest but has since withdrawn. Mercedes-Benz declined to comment on the talks with KNDS, while VW stated it is reviewing “viable prospects” for Osnabrück after the current production ends in 2027, and that it remains “in discussion with various market players on different options”. KNDS confirmed that it is speaking with several companies regarding the acquisition of production capacities.
