Europe's car makers are in crisis. Will the threat of war rescue them?

Europe's car manufacturers are facing a crisis as the industry appears to be in a terminal decline. In response, some are hoping that the threat of war could provide a lifeline. Ford is actively exploring the possibility, with its Dagenham plant in the UK currently producing engines for military vehicles. The plant has seen output plummet from 90,000 engines a year to roughly half that over the past decade, and Ford is bidding for a Ministry of Defence contract to supply 9,000 vehicles over the next five to seven years.

Renault, too, is looking to the military for growth, having signed a strategic agreement with defence giant Thales to produce military drones at a rate of up to 1,000 units per month. Jaguar Land Rover, the UK's largest car manufacturer by value of output, is also exploring military opportunities as it prepares to retire its existing Land Rover-based fleet by 2030.

The Society for Motor Manufacturers and Traders (SMMT) trade association argues that the UK's automotive supply chain is heavily reliant on a few big manufacturers and is vulnerable due to a decline in production over the past decade. With automakers spending billions on transitioning to electric vehicles and Chinese rivals posing a threat, many see defence as a way to broaden their customer base and tap into existing manufacturing capacity.

However, there are concerns that job cuts in the sector, such as those announced by Jaguar Land Rover, could further weaken the supply chain.