From Car Parts to Kamikaze Drones: Rheinmetall’s Factory Flip and Korean Missile Push
Published on 06/17/2026 at 21:01 | Redaktion boerse-global.de
It is a conversion with symbolic weight. An old auto-components plant in Neuss, once dedicated to civilian supply chains, is being gutted and rebuilt to churn out loitering munitions — the military’s term for kamikaze drones. Rheinmetall expects the first of these weapons to roll off the line in the third quarter of 2026, alongside the launch containers that carry them. The move marks a clean break from the group’s automotive heritage and underscores its full embrace of the defence sector.
That factory transformation is only one part of a broader strategic reshuffle. At the Eurosatory arms fair in Paris, Rheinmetall unveiled plans to form a joint venture with South Korea’s LIG Defense & Aerospace. The German group will hold a majority stake in the new entity, which will focus on medium- and long-range missile systems as well as short-range air defence. Rheinmetall intends to localise the Korean technology in Europe, further develop it, and then market the whole package to NATO and European customers — supplementing its own existing short-range air-defence offerings. The aim is to position itself as a system integrator capable of delivering layered air, drone and missile defences at a time when European governments are stepping up their discussions on exactly that kind of multi-tier protection.
Operationally, the company’s order books are bulging. First-quarter revenue climbed 8% to €1.9bn, and the backlog hit a record €73bn at the end of March. The management expects growth to accelerate in the current second quarter and has kept its full-year forecast unchanged. Beyond drones and missiles, work continues on traditional artillery: a new 155mm system is designed to increase howitzer range by a third, and the group is pushing for more independence on major platforms amid reports that Paris may slash budgets for the Franco-German MGCS main battle tank project.
Should investors sell immediately? Or is it worth buying Rheinmetall?
Yet the share price tells a different story. On Wednesday, Rheinmetall stock traded at around €1,170, up 1.79% on the session but down roughly 27% since the start of the year. The recent low of about €1,100 was hit in mid-May, and the relative strength index now sits at 41.5, hinting at a tentative stabilisation. The stock remains barely 6% above its 52-week trough and well below its moving averages.
Investors should note that the partnership with LIG is so far only a memorandum of understanding — no binding joint venture has been signed, and no purchase orders have been confirmed. The true commercial value of the alliance depends on future contracts from European buyers, and none have materialised yet. Similarly, the Neuss drone line will not add to earnings until 2026 at the earliest. For now, the market is weighing the record order pipeline against the lack of near-term catalysts from these new initiatives.
The next hard numbers come on 6 August 2026, when Rheinmetall releases its second-quarter results. Until then, the transformation narrative is clear, but the financial payoff remains a promise waiting to be kept.
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