Volkswagen plant restructuring
Volkswagen plans to sell Osnabrück plant
A future beyond vehicle production is taking shape for Volkswagen’s Osnabrück plant. The state of Lower Saxony and Israeli investor Aurelius Capital are looking to take over the site and transform it into a centre for security and defence solutions.
A fundamental change is taking shape at Volkswagen’s Osnabrück site, after months of speculation over its future. The Wolfsburg-based carmaker has agreed key terms with the state of Lower Saxony and Israeli investment company Aurelius Capital for a potential sale of the plant.
The aim is to secure the site over the long term and gradually develop it into a competence centre for security and defence solutions, according to Volkswagen. VW group works council chair Daniela Cavallo had already identified defence manufacturing as a possible option for Osnabrück in March.
The agreement gives Volkswagen its clearest indication yet of what could follow vehicle production at a German site where automotive manufacturing was already set to end. The company decided in 2024 that vehicle production in Osnabrück would cease in summer 2027.
New owner, new industrial role
Under the proposed structure, Aurelius Capital would acquire a majority stake in Volkswagen Osnabrück GmbH. Together with Lower Saxony, the partners intend to establish new industrial activities at the site.
The first anchor project under consideration is a partnership with Israeli defence company Rafael Advanced Defense Systems. The parties are examining the production of systems and components for air-defence applications serving Germany and Europe.
“Today we are building a long-term industrial partnership with our German partners, with the goal of fully producing the technology in Germany to protect Germany and Europe,” said Rafael chief executive Joav Tourgeman.
Volkswagen intends to support the transition and contribute its manufacturing and industrialisation expertise. Existing infrastructure and the skills of the workforce are expected to play a central role.
“Volkswagen stands by its responsibility for Osnabrück. With today’s agreement, we are taking an important step towards opening up a new industrial future for the site,” said group chief executive Oliver Blume.
Another step in Volkswagen’s wider restructuring
The Osnabrück plan comes as Volkswagen moves through one of the broadest restructuring programmes in its history.
Only days earlier, the supervisory board approved large parts of the group’s Future Plan 2030, which includes reducing excess production capacity in Europe, shrinking the model portfolio and further cutting headcount.
At the same time, the long-term future of several German plants, including Emden, Zwickau, Hanover and Neckarsulm, remains unresolved.
Against that background, Osnabrück could become an early example of what industrial repurposing might look like at a site where vehicle production is running out.
The difference is that Osnabrück already has a named investor and a defined industrial direction, while alternative-use concepts for other Volkswagen sites remain at an earlier stage.
A future for more than 1,200 employees
According to labour representatives, the concept initially offers a perspective for most of the workforce.
“More than 1,200 people will have a future at their site,” Cavallo said. Work is continuing on solutions that could provide long-term employment for the entire permanent workforce.
Lower Saxony minister-president Olaf Lies also sees an industrial policy opportunity in the project. With Europe’s security environment changing, he said Germany and Europe would have to strengthen their capabilities, adding that Osnabrück could “play an important role”.
The sale has not yet been completed. The agreement forms the basis for further negotiations on ownership, organisation and the economic structure of the future operation.
Any transfer of Volkswagen Osnabrück GmbH remains subject to further contracts, corporate approvals and regulatory clearance.
What is Rafael?
Rafael Advanced Defense Systems develops and manufactures a broad range of defence technologies.
Its portfolio includes Iron Beam, a laser-based system designed to intercept airborne threats, as well as the Trophy active protection system, which is designed to detect and destroy incoming anti-tank weapons. Trophy is used on Germany’s Leopard battle tank.
The company traces its origins back to a research organisation established by the Israeli military in 1948.
From Karmann to Volkswagen
Volkswagen’s Osnabrück plant grew out of the former Karmann operation, one of Germany’s best-known contract manufacturers and body specialists.
Karmann began producing the Beetle Cabriolet in 1949 and later built a wide range of niche vehicles, particularly convertibles and sports coupés, for several carmakers. Its customers included Volkswagen, BMW, Renault, Jaguar, Kia and Mercedes-Benz. The company became internationally known through the Karmann Ghia.
Karmann filed for insolvency in 2009, after which Volkswagen took over large parts of the site.
Then Lower Saxony minister-president Christian Wulff, who also sat on Volkswagen’s supervisory board, played an important role in the process. With his electoral constituency based in Osnabrück, Wulff supported Volkswagen’s involvement in the city and the takeover of substantial parts of the former Karmann operation.
Vehicle production is running out
Volkswagen continued to operate Osnabrück as a small multi-brand plant, specialising in low-volume production, niche models and overflow capacity from other factories in the group.
In recent years, however, the site’s outlook has become increasingly uncertain.
Production of the Porsche models built in Osnabrück ended at the close of 2025, while Porsche also cancelled an expected follow-on programme for an electric sports car.
The only vehicle currently still produced at the plant is the T-Roc Cabriolet.
With passenger-car production due to end in 2027, a future for the site outside conventional vehicle manufacturing has been under discussion for some time. The proposed sale would now turn that debate into a much more concrete industrial transition.
