Mercedes-Benz CEO Ola Källenius said the German automaker would consider entering defense production if it made business sense. Speaking to the Wall Street Journal, he emphasized that Europe needs to bolster its defense profile as the world has become more unpredictable.

Mercedes-Benz isn't alone in exploring defense work. Volkswagen is in talks with Israeli companies to produce components for the Iron Dome artillery defense system by 2027, using idle factory capacity. The German manufacturing sector, largely stagnant for years, sees defense as a potential growth opportunity.

Rheinmetall, Germany's biggest arms manufacturer, is already expanding aggressively. The company aims to start cruise missile production with a Dutch defense technology company this year. This week, it announced a partnership with Deutsche Telekom to develop a drone defense shield for critical infrastructure.