Volkswagen Eyes Production Shift From Cars to Parts for Israel’s Iron Dome

German automotive manufacturer Volkswagen is reportedly planning to shift one of its factories from producing cars to manufacturing components for Israel’s Iron Dome. 

According to sources quoted by the Financial Times, the company is in talks with Israel’s state-owned Rafael Advanced Defense Systems to possibly repurpose Volkswagen’s Osnabrück plant, which is at risk of closing.

Volkswagen has been eyeing either to sell or revamp its Osnabrück site with around 2,300 employees, following the end of production contracts for its Porsche and T-Roc Cabriolet vehicles, and plunging profits arising from competition with Chinese electric vehicles.

Production could start within 12 to 18 months if the workers agree to the change, as per the report. 

Osnabrück would not manufacture the Iron Dome’s missiles. Instead, Rafael proposed plans for a separate facility in Germany that specializes in missile production, as the company aims to sell the short-range air defense system to Europe. 

Germany’s defense ministry declined to comment on the alleged development.

Volkswagen in Defense

This would not be the first time Volkswagen has turned toward the defense sector, as it produced Kübelwagen light utility vehicles and the Schwimmwagen amphibious vehicle for the German military in World War II.

In March 2025, the German company’s CEO Oliver Blume announced the firm’s intent to build tactical capabilities for the German Armed Forces, supporting Berlin’s defense modernization and supply chains.

A year later, the company presented military vehicle prototypes developed in secret, based on Volkswagen’s Amarok pickup and Crafter van. They displayed without the company logo at a defense convention in Nuremberg.