Frankfurt/Düsseldorf (Reuters) – Rheinmetall, a German group specializing in armaments and automotive equipment, plans to convert two of its automotive factories in Germany to the production of defense equipment.

The sites concerned are the factories of Berlin and Neuss, which make automotive parts.

According to the project, which must still be finalized, the two factories would integrate the weapons and ammunition division of Rheinmetall to manufacture mechanical and protection components, and would be converted into hybrid plants so that automobile production can persist.

“Above all, the factories will benefit from the industrial force of the Rheinmetall group as a major supplier of military equipment, as well as the high demand from customers in Germany and around the world,” the group told Reuters in an email .

The company said that no final decision had been made concerning the new structure.

The actions of European weapons manufacturers jumped pending a boom for spending after US President Donald Trump said Europe was to take up its defense expenses. The aerospace and defense Stoxx index reached records last week.

This new deal could stimulate the German manufacturing industry at a time when traditionally strong sectors, including car manufacturers such as Volkswagen, reduce their capacities and suppress thousands of jobs.

Rheinmetall’s market value has increased since the invasion of Ukraine by Russia three years ago.

Two years ago, the company was raised to the rank of safe value of the Dax 30 and is today worth around 39 billion euros (40.8 billion dollars), according to LSEG data, or almost double of its value before the election of Donald Trump.

The appetite of investors for defense assets also increases, Thyssenkrupp preparing a split of its TKMS warship division, while KNDS plans a stock market rating at the end of 2025.

(Report Christoph Steitz and Matthias Inverardi; Mara Vîlcu, edited by Sophie Louet)

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