Business Unit Defense
Industrial expertise for a security-relevant market
With the Business Unit Defense, DEUTZ is responding to a market that has fundamentally changed within a short period of time: Defense is no longer a niche or secondary market, but a strategically important industrial sector with its own rules, its own stakeholders and very specific requirements. We want to make our contribution to the security of Germany and Europe and play a relevant role in the defense market.
For DEUTZ it was clear: if we want to address this market in the long term, we need a dedicated strand for it, our own business unit. Strict regulatory requirements, export controls, political decision-making processes and complex procurement logic call for specific know-how and clear responsibilities. In addition, new technologies such as unmanned systems and software-based applications in the defense sector are developing at tremendous speed; drone technology, for example, is sometimes updated on a daily basis. This shows that the defense market cannot be served “on the side”. That is why, with the independent Business Unit Defense, we are setting a clear focus.
Access to a broad portfolio
The Business Unit Defense does not see itself as an independent product or development unit, but as a go-to-market interface that draws on the entire DEUTZ portfolio. In this way, we make the strengths of DEUTZ available to meet demand in the defense segment without building parallel structures: development, engineering, production and service remain within the existing business units and are integrated into defense projects as required.
Concretely, this means: when it comes to robust combustion engines for military vehicles such as troop carriers and infantry fighting vehicles, or for stationary applications, Defense accesses the portfolio of the Business Unit Engines; when there is demand for electrified and hybrid drive systems, NewTech comes into play; when mobile energy and power supply solutions are required, Energy is ready. This broad range of offerings is complemented by the highly professional and globally available services of the Service Business Unit.
This setup strengthens the overall portfolio of DEUTZ, because the requirements from the defense market feed back into product development and service concepts, making us more resilient and future-proof overall.
Industrial competence and defense know-how
The Business Unit Defense focuses on market development. The team is largely recruited from DEUTZ employees. They bring in-depth product, technology and process knowledge and are familiar with the industrial structures, the portfolio and the way DEUTZ works.
At the same time, we have deliberately created new functions and profiles that previously did not exist at DEUTZ, or only to a limited extent – for example in business development and sales with a focus on the defense market, in the area of government relations or for tasks related to export control and regulation. These capabilities are crucial for tapping into and developing the market in a professional and compliant manner. The combination of long-standing DEUTZ professionals and specialists with strong defense expertise guarantees both industrial know-how and a deep understanding of the market and systems.
Technological strengths
DEUTZ brings all the prerequisites for a successful strategic entry into the defense market: first and foremost, our industrial competence. As one of the world’s leading engine manufacturers, we stand for reliable, powerful and durable drive solutions that function even under extreme operating conditions. Our engines run – whether in extreme heat or severe cold, at high altitudes or under continuous heavy load. This robustness is essential for military applications.
Secondly, DEUTZ is able to scale technology industrially. Our production sites in Cologne and Ulm offer both high manufacturing capacities and structures for small batches, customized adaptations, and the implementation of alternative drive concepts. This enables us to serve conventional military platforms and new, technology-driven applications equally well.
Our technological openness also offers clear advantages for customers in the defense market: in addition to proven combustion engines, the implementation of electric and hybrid systems is easily possible and has been tried and tested by DEUTZ. And we make sure the systems keep running. Our global service network is fast, professional and reliable. Maintenance, servicing and spare parts availability are at least as critical in the defense environment as the initial delivery. Where necessary, we are able to replace existing drive systems in military vehicles at very short notice and have already done so several times.
Finally, we also have the expertise to adapt civilian engines for military use. We can configure engines to run on NATO fuels, prepare them for extreme operating conditions and ensure that they remain fording-capable – that is, ready for use in deep water.
Partner for established players and start-ups
The combination of all our capabilities makes DEUTZ an attractive partner both for established so-called defense primes (defense prime contractors) and for young defense-tech players.
The creation of the Business Unit comes at a time when the market is visibly opening up: demand for additional industrial capacities and additional suppliers is growing, creating the opportunity for long-standing partnerships between defense primes and their suppliers to open up. At the same time, a start-up and scale-up scene for defense applications is emerging. These young companies are developing highly innovative systems but frequently reach their limits when it comes to scaling, industrialization and service. Here too, we are on hand as a partner. DEUTZ is deliberately positioning itself in both worlds: as a reliable industrial partner for established players and as an enabler for new, technology-driven actors.
Acquisitions and strategic alliances
The Business Unit Defense aims to establish a solid ecosystem. To this end, it is actively seeking top-tier partners and focusing on acquisitions of innovative companies that enhance the DEUTZ portfolio. We succeeded twice in 2025: in September 2025, we acquired the SOBEK Group, thereby gaining access to a rapidly growing segment within the defense market: electric high-performance drives for unmanned systems, especially drones. These systems are becoming increasingly important in reconnaissance and in protection and defense applications.
SOBEK thus adds a capability to the DEUTZ portfolio that goes beyond traditional drive technologies. While DEUTZ stands in particular for industrial scaling, robust hardware and energy infrastructure, SOBEK has extensive expertise in highly dynamic electric drive solutions for airborne applications. This acquisition strengthens our technological compatibility with modern requirements in the defense segment.
The partnership with ARX Robotics agreed in October 2025 is also strategic. The aim is to use battery-electric drives and, in the future, also smaller combustion or hybrid drives from DEUTZ in unmanned land vehicles from ARX Robotics. This too is a genuine win-win situation: ARX benefits from DEUTZ’s production capacities, engineering expertise and global service network, while we gain access to an innovative and rapidly growing segment of the defense market.
Defense as a building block of the Dual+ strategy
Strategically, the Business Unit Defense is an integral element of the DEUTZ Dual+ strategy. Dual+ stands for a broader, more resilient positioning of the company and for growth in markets that we can serve technologically. The Unit fulfills exactly these criteria: it makes existing products and competencies usable for new applications and thus reduces dependence on individual economic cycles or industries.
Incidentally, DEUTZ is not a newcomer in the defense market. Historically, the company was involved in the motorization of military vehicles up until the 1990s and has also supplied engines for military applications on a smaller scale in more recent times. Predecessor models of current engine generations are used, for example, in military vehicles such as the Fennek or the Polish Oncilla; other applications serve power generation or re-engining projects. The Business Unit is bundling these experiences strategically for the first time. It positions DEUTZ in a market that is gaining considerable importance from an economic, industrial and defense policy perspective. And it shows: we are ready to assume industrial responsibility in security-relevant future fields as well.
INTERVIEW
Why does the Business Unit Defense exist and what exactly are your plans?
Marco Herre, Head of Business Unit Defense: With the Business Unit Defense, we want to contribute to the defense capability of Germany and Europe while at the same time developing an attractive, technologically sophisticated business field.
We very consciously decided to serve the defense sector strategically. The market has its own rules, its own stakeholders and very specific requirements, for example in export control or in dealing with political decision-making processes. This calls for a clear structure, which is why we established the Business Unit Defense.
Why now?
Marco Herre: The timing of this step is no coincidence. Defense spending is rising, supply chains are being rethought, and the need for industrial scaling is growing. At the same time, the market is reaching structural limits: in some segments, a few suppliers dominate. This creates dependencies, which in turn increase the desire for alternatives.
What objectives is the Business Unit Defense intended to achieve for DEUTZ?
Marco Herre: The Business Unit Defense is set up as a go-to-market entity. We bundle market access and draw on the existing DEUTZ portfolio. Our goal is to develop this market professionally, in compliance with regulations, and on a long-term basis. Within our Dual+ strategy, Defense is firmly established as an independent business segment. For us, Dual+ means positioning ourselves more broadly and more resiliently and growing in markets that we understand technologically. Defense is exactly such a market: demanding, long term and with attractive value-creation profiles.
What qualifies DEUTZ for the strategic entry into the defense market?
Marco Herre: On the one hand, we have many years of industrial experience. DEUTZ stands for robust, durable drive solutions that operate reliably even under extreme conditions. This is a basic requirement in the defense sector. On the other hand, we have production capacities that can be scaled, both for larger volumes and for customized solutions. Added to this is our technological breadth, from conventional combustion engines to electrified and hybrid systems, as well as our global service network. This combination is a clear advantage in the defense market and gives us a “right to win.”
What are the challenges in the strategic entry into the defense market?
Philipp Kitterer, Head of Business Development & Strategy Defense: The biggest challenge lies less in the technology than in the framework conditions. The defense market is heavily regulated, approval processes are complex, and political decisions play a central role. In addition, there are partnerships that have grown over decades between major defense companies and their suppliers. You don’t gain access there overnight. Market entry often takes place on a project basis or via new platforms. That is why you need patience, a good understanding of the structures and very clean governance.
An important element of the defense strategy is the development of a robust ecosystem. What does that mean in concrete terms?
Philipp Kitterer: It means that we rely on partnerships and targeted acquisitions. The principle is very simple: DEUTZ provides drive solutions, energy infrastructure, production and service expertise. Our partners contribute software, system intelligence, and new application concepts. It is not about stand-alone products, but about networked systems. All sides benefit: we gain valuable access to innovative technologies, and our partners benefit from our industrial competence.
How is the market responding to the establishment of the Defense Unit?
Marco Herre: Very positively. DEUTZ is a well-known brand and stands for quality and reliability. We can see that both among established corporations and among young defense-tech companies. The market clearly welcomes the fact that another industrially strong player is entering the field. At the same time, we are experiencing great openness from start-ups that are specifically looking for partners who can enable scaling and industrial implementation.