German car giants shake off their Nazi past to prepare for war

“The mood in Germany is one where the excess capacity in the car sector, which has long been an issue, is now morphing into a debate about how car makers can switch into defence production,” says Sander Tordoir, the chief economist at the Centre for European Reform.

“What would Porsche do? It’s not quite clear. But it’s understandable that they’re moving into that space.

“Their empire of investments today has some weak links, including Volkswagen. And of course, it’s not good for Porsche to be hit with US tariffs either. “So this makes sense for them, I think, because defence is where the dynamism in German industry will now be.”

...Moving the Porsche family’s existing businesses into defence at this late stage is likely to be risky, however. More likely, Tordoir believes, is that the clan will seek to expand its holdings in defence start-ups and contractors through targeted investments.

“There’s a certain degree of myopia and desperation”, he says. “There are plenty of other German defence companies, including quite a few that are doing well in the space and have an innovation lead on carmakers.

“So investing in German defence startups should be easier, in many ways, than re-rigging existing industrial sites.”