From left: Oliver Blume, Volkswagen Group chief executive, Olaf Lies, premier of Lower Saxony, and Tomer Jacob, Aurelius Capital chief executive. Photo: Volkswagen Group.
Volkswagen prepares to sell the Osnabrück plant. The car factory is to produce defence systems
Volkswagen has set the basic terms for a possible sale of its plant in Osnabrück, Germany, to the investment company Aurelius Capital and the state of Lower Saxony. After car production stops, scheduled for summer 2027, the factory is to be gradually converted into a centre for security and defence technologies.
The first project under review is a collaboration with the Israeli company Rafael Advanced Defense Systems to manufacture systems and components for air defence in Germany and other European states. Volkswagen has not specified which equipment will be built, nor the date on which the new production would start.
The agreement is not yet the definitive sale
The documents signed on 7 September 2026 set the basic structure of the transaction. The plan provides for Aurelius to become the majority shareholder of Volkswagen Osnabrück GmbH, with Lower Saxony taking a stake in the new company.
The transfer is not, however, completed. According to the Volkswagen Group statement, the parties still have to settle responsibilities, organisation and economic conditions. The deal still needs definitive contracts, approval by governing bodies and clearances from the authorities.
| Element | Situation on 7 September 2026 |
|---|---|
| Proposed majority buyer | Aurelius Capital |
| Public partner | State of Lower Saxony |
| First industrial partner | Rafael Advanced Defense Systems |
| Initial project | Systems and components for air defence |
| End of car production | Summer 2027 |
| Sale completed | No |
| Transaction price | Not announced |
Production of the Volkswagen T-Roc Cabriolet ends in 2027
Volkswagen had already decided in December 2024 to stop building cars at Osnabrück in summer 2027. At present, the plant still builds the Volkswagen T-Roc Cabriolet, a niche model for which no next generation is being prepared.
Production of Porsche models made at this factory ended at the end of 2025. Osnabrück also did not receive the project for a new electric sports car, so after the T-Roc Cabriolet there was no group model allocated to the assembly lines.
The plant comes from the former Karmann unit, a company specialised in convertible bodies and small-series cars. Volkswagen took over most of the assets after Karmann’s insolvency in 2009. In the following years, models such as the Golf Cabriolet, Porsche Boxster and Cayman, Volkswagen Arteon and various special series were assembled here.
More than 1,200 employees would have a prospect in the new structure
The plant has about 1,800 employees, according to information published by German public media. Volkswagen’s works council says the agreement offers a prospect for more than 1,200 people in Osnabrück. Other estimates cited by ZDF indicate nearly 1,400 posts that could be retained.
The difference between the two figures shows that the staffing scheme is not settled. Daniela Cavallo, chair of Volkswagen’s general works council, said negotiations continue to find a solution for the remaining permanent staff as well.
Volkswagen will accompany the transition and make available experience accumulated in development, industrialisation and production. Factory employees are to have a direct role in installing and organising the new lines.
What Rafael would produce at Osnabrück
Rafael is an Israeli state company specialised in defence systems. Its portfolio includes air-defence systems and active protection for military vehicles. At Osnabrück, the proposed collaboration refers to possible manufacture of systems and components for air defence, without the parties naming a specific product.
Earlier information about talks mentioned components associated with anti-aircraft systems and auxiliary equipment. The official September agreement does not, however, confirm production of missiles, of the Iron Dome system or of a particular type of weapon. Any such attribution remains premature until the industrial project is presented.
Aurelius Capital, a company based in Tel Aviv, invests in firms in defence, cybersecurity, artificial intelligence and critical infrastructure. Rafael would supply the technology and specialist experience, while the factory and staff in Osnabrück would provide industrialisation and local production.
Why Lower Saxony is involved
Lower Saxony holds 20% of Volkswagen’s voting rights and has two seats on the group’s supervisory board. Direct participation in the future company would allow the state to influence investment, employment and the development of the industrial site.
Premier Olaf Lies linked the project to Germany’s and Europe’s need to increase security capacity. For regional authorities, the immediate objective is to avoid closing a plant with skilled staff and to keep industrial activity in Osnabrück.
Volkswagen does not become an arms manufacturer through this agreement. The carmaker is to leave the factory’s shareholding after the transfer, and the new activity will be organised by Aurelius, Lower Saxony and the industrial partners brought into the project.
Conversion will take place after car production stops
The T-Roc Cabriolet will continue to be built until summer 2027, according to the timetable agreed by Volkswagen with the unions. After that, the plant’s transformation will be done in stages, depending on contracts, authorisations and orders obtained by the new company.
The sale value, the conversion budget and the volume of future production have not been published. Volkswagen and its partners say they will communicate details only once agreements and plans are precise enough.
Frequently asked questions
Has Volkswagen already sold the Osnabrück factory?
No. The parties have agreed the basic terms for a possible sale. Definitive contracts, internal approvals and clearances from the authorities are still required.
When does car production stop?
Volkswagen schedules the end of car production for summer 2027, with the withdrawal of the T-Roc Cabriolet.
What will be produced instead of cars?
The first proposed project targets systems and components for air defence, in collaboration with Rafael Advanced Defense Systems. The exact product has not been announced.
What happens to employees?
The works council says more than 1,200 people have a prospect in the new structure. The final number and solutions for the other staff are still under negotiation.
