Leopard 2A8 Tank Plant Opens in Lithuania Near NATO Flank

Production and maintenance Leopard Production Moves Closer to NATO’s Eastern Flank

2026-10-03 From Detlev Karg 1 min Reading Time

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Construction has started on a new Leopard 2A8 assembly and maintenance facility in Kaunas, Lithuania, marking another step in the expansion of European defence industrial capacity closer to NATO’s eastern flank.

Symbolic image of a Leopard 2 main battle tank: Production and maintenance starts in Lithuania.(Picture: AI generated) — Symbolic image of a Leopard 2 main battle tank: Production and maintenance starts in Lithuania.
(Picture: AI generated)

The 13,000-square-metre facility in the Kaunas Free Economic Zone will be operated by Lithuania Defence Services (LDS), the joint venture established by Germany’s KNDS Deutschland and Rheinmetall Landsysteme. Lithuanian construction company YIT Lietuva is expected to complete the €29 million facility by November 2027, with the first Leopard 2A8 assembled in Lithuania scheduled for late 2028. The plant is expected to create up to 100 jobs. Lithuania has ordered 44 Leopard 2A8 main battle tanks. According to LDS chairman Markus Franz Schmidt, 38 are expected to be assembled in Kaunas, while at least six will be manufactured in Germany.

Stake for Lithuanian joint venture LDS

The project is also gaining a direct Lithuanian state interest. An agreement signed during the groundbreaking ceremony will see state-owned EPSO-G Invest acquire 25.1% of LDS, leaving KNDS and Rheinmetall with 37.45% each. LDS reportedly plans to invest around €50 million in Lithuania. The facility goes beyond local assembly. It is intended to provide maintenance and repair capabilities for Leopard tanks and other military vehicles, strengthening the industrial support infrastructure available close to NATO forces in the Baltic region.

Know-how transfer to partner countries

The investment reflects a broader shift in Europe’s defence industry. As NATO reinforces its eastern flank, production, maintenance and supply-chain capacity are increasingly being established closer to potential areas of operation. For German defence groups such as Rheinmetall and KNDS, this also means transferring industrial capabilities and know-how to partner countries while building more resilient regional support networks.

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