Facing a downturn in the automotive market, major automotive equipment suppliers are actively seeking new outlets and ways to utilize their manufacturing plants by branching into the defense industry and drone manufacturing, according to Boursorama.
Automotive Suppliers Pivot Toward Defense Drones
Forvia announced that it will begin assembling drones in Europe. The company did not disclose the name of its partner, describing it as a pioneering European defense technology company specializing in air defense and artificial intelligence-based counter-drone systems. According to Forvia CEO Martin Fischer, the models will be produced in France and Germany at an initial rate of 500 interceptor drones per month, with a goal of scaling production to 1,000 units monthly. Forvia already supplies lighting solutions and electronic systems for military and security applications via its subsidiary Hella.
Valeo announced that starting in 2027, it will produce a rare-earth-free electric motor for drones designed by the French startup Harmattan AI at one of its French sites. Valeo CEO Christophe Périllat noted that the new venture leverages the company’s scaling expertise in a rapidly growing market to offset sluggish automotive growth.
Additionally, Schaeffler is partnering with the Toulouse-based drone manufacturer Delair. Due to limited space at Delair’s Labège site, a new production line is being established at Schaeffler’s plant in Boussens, Haute-Garonne, to build MX-10 Damoclès remotely operated munitions qualified by the DGA and delivered to French forces.
Valeo Expands into AI Chip Cooling and Data Centers
Beyond defense, Valeo is expanding its portfolio into thermal management solutions for artificial intelligence chips and data centers, according to tradingsat.com. Valeo announced a partnership with the Belgian company Calyos to industrialize advanced cooling systems for AI processors. While not a commercial contract, the agreement positions the supplier in the expanding data center market.
Valeo noted that accelerating AI usage increases processor heat and power demands, creating an urgent need for thermal efficiency to optimize global energy consumption and power usage effectiveness (PUE). This alliance follows a partnership established with Strasbourg-based computer server manufacturer 2CRSI to develop cooling systems for outdoor edge data centers near 5G antennas.
Suppliers Call for European Local Content Mandates
In a joint push for regional industrial protection, the chief executive officers of Valeo, Forvia, and OPmobility—Christophe Périllat, Martin Fischer, and Félicie Burelle—published a column in Les Échos requesting that the European Union mandate a minimum of 75% local content for vehicles assembled in Europe across all powertrains, according to bfmtv.com.
The executives argued that competing automotive industries in North America and Asia receive specific state support and protection, necessitating equivalent rules within the EU to incentivize local assembly using European components. The trio specified that this preference should be restricted strictly to the 27 EU member states, excluding trade partners like Turkey and Morocco, and requested a separate treatment for batteries to prevent uniform thresholds from sidelining the rest of the industrial supply chain.
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