MILAN and BELFAST — In January, French multinational corporation Renault Group announced it was partnering with another France-based startup, Turgis Gaillard, to produce up to 600 drones per month for the French Ministry of the Armed Forces.
But Renault, known continent-wide as a car producer, is being very careful in how it is describing that effort, with a spokesperson saying the firm has “no intention of ‘entering’ the weapons production sector or becoming a major player in this industry.”
“Regarding defense projects, this is a one-off opportunity where the company was consulted to contribute to discussions led by the French Defense Procurement Agency,” the spokesperson told Breaking Defense recently.
The Renault situation is just one example of what analysts describe to Breaking Defense as a situation starting to play out across Europe: Car manufacturers exploring if they can take extra production space, and cash in on the sudden influx of defense spending from local governments, while doing so in a way that feels one-foot-in and one-foot-out.
But while European defense leaders, desperate for increased production capability, may be very interested in pursuing the opportunity, Max Becker, a policy fellow at the German Council on Foreign Relations, said it “remains to be seen” if a broad trend is emerging or whether this will be a case to “only affect individual companies or specific business divisions.”
An Early Trend?
Renault’s drone partnership materialized under the Chorus project — a long-range strike drone designed as the French answer to Shahed-type threats, which the country aims to bring into production. Renault was specifically tapped to contribute its expertise to rapidly industrialize the program and will be responsible for manufacturing only the drone’s structure at its Le Mans plant.
However, the spokesperson emphasized that although a production line dedicated to drones will be installed within the facility — on an undisclosed timeline — the site itself is not being transformed and will retain its specialization in the development of chassis for Renault’s vehicles.
Over in Germany, the Financial Times reported that the Volkswagen Group was in talks with the Israeli state-owned company Rafael to potentially convert one of its plants to produce components for the Iron Dome — an announcement that kicked off at least one local protest.
With its Osnabrück site struggling and set to be phased out of current production by 2027, a Volkswagen spokesperson told Breaking Defense that the company “continues to explore viable options for the Osnabrück site and is in dialogue with various market players.”
The representative added that, within the company’s production network, the facility is specifically designed for order-oriented, small-series and “special projects.” A decision on the future of the Osnabrück site is set for this year, they added.
Regarding the FT report, the spokesperson said, “The production of weapons by Volkswagen AG remains ruled out for the future.” Notably, that statement was not a full denial of the report, which had said parts or components could be produced at the facility, not full weapons. Rafael did not respond to a request for comment.
As a result of not having “expertise” in production of “truly critical capabilities” like warheads, fuses, rocket propulsion and guidance systems, Becker said that “automotive players” are instead “taking on more of a supplier role for less critical” parts. He noted that examples include Iron Dome launcher systems, power generators, and trucks used to transport the air defense systems missiles.
Interestingly, in 2025, MBDA revealed plans to collaborate with an undisclosed automotive maker to produce up to 1,000 units per month of a one-way attack drone, simply dubbed One Way Effector.
“It’s still a partnership that needs to be thought through at the beginning, because the ammunition needs to be built and engineered in a way that will be produced on the factory lines of the automotive industry,” Hugo Coqueret, business development manager, battlefield domain, told reporters on the sidelines of the Paris Air Show last June.
However, those plans have since fallen through: In an April 30 statement to Breaking Defense, an MBDA spokesperson said, “No automotive manufacturer is involved in this project.” (Without disclosing an order quantity, the MBDA spokesperson did say that a contract with France has been signed and deliveries are planned for 2027).
Why Now?
Analysts point to two trends driving the potential for defense firms to tap into automotive production capabilities.
The first, and most obvious, is that there is simply more European defense spending than in recent memory. Germany, in particular, is ramping up its defense spending levels in such a way that it needs more materiel to buy.
The second, and less obvious reason, involves Chinese automotive competitors rapidly gaining “unprecedented” market share in Europe, according to a recent study by the independent research provider Rhodium Group. That is starting to have an impact on the domestic car giants, and, in turn, may lead them to look for ways to supplement their income and avoid dead production space.
Taken together, the “signals” from Volkswagen and the Pentagon’s reported move to open up discussions with General Motors and Ford, “could point to a partial reversal of the 1990s trend of converting military [products] into civilian car industries” said Lorenzo Scarazzato, researcher in the military expenditure and arms production program at the Stockholm International Peace Research Institute.
“However this trend is still incipient,” he said, and pointed to situations where industry recently split off defense arms, such as when the Volvo Group sold French armored vehicles manufacturer Arquus in 2024.
Matteo Mazziotti di Celso, a visiting research fellow at the Centro di Studi Militari Marittimi, told Breaking Defense that “in countries like France and Germany this kind of [automotive industry pivot to weapons production] conversation is indeed taking place.”
He expects such a trend to continue “at least as long as substantial funding remains available — especially from the EU, but also potentially from private actors.”
However, Becker raised two key issues that frame the debate: expectation management and the scope of industry contribution from the carmaking industry.
The idea that “a struggling economic sector can be rescued simply by pivoting to defense manufacturing is not accurate, even if overall growth in the defense sector may soften the downturn to some extent,” he said.
Additionally, “numbers put things in perspective: Germany’s automotive industry generated around €536 billion in revenue in 2024, while the five largest German defense companies combined reached roughly €30 billion,” meaning, Becker said, defense “can simply not replace” car manufacturing.
Mazziotti di Celso warned that civilian-to-military conversion is “technically and organizationally very complex,” while also cautioning that elsewhere in Europe, a different story to France and Germany is taking shape. “In Italy, however, I don’t see major civilian-to-military reconversion processes underway. Rather, what we are seeing is a strengthening of already existing military sectors.”
He pointed to the examples of shipbuilder Fincantieri rolling out plans to double production by the end of the decade and Leonardo’s acquisition of Iveco Defence Vehicles to underline major recent moves that sit front and center of Italian industrial planning.
At a broader level, carmakers will become interested and assess the advantages of venturing into the defense sector as long as profitability is realistic and investment makes sense, said Jerry McGinn, the director of the Center for Strategic and International Studies’ Center for the Industrial Base.
Mazziotti Di Celso said that “special situations” can apply when governments create incentives for industry.
