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

It's green, bulging and intimidating. Ford's latest vehicle looks like a pick-up truck that has been through an Incredible Hulk transformation. Based on its popular Ranger series, this beefy number parked outside the front door of Ford's Dagenham plant can carry a load of two tonnes, tow up to four tonnes and is also shouldering the hopes of the 2,000-strong workforce that still makes engines here.

Inside the factory, the three-litre diesel engines that will power this camo-painted beast drift down a production line that has seen output cut from 90,000 engines a year to about half that over the last decade.

Ford is hoping that a pivot towards military vehicles can help fill the void created by what the company's UK boss calls the most challenging environment since the invention of the motor car. Once mighty, the European car industry is starting to look puny and is hoping surging defence budgets as Europe re-arms can help it flex its industrial muscles once more.

Ford is part of a joint venture with defence specialists General Dynamics and Ricardo bidding for a Ministry of Defence (MoD) contract to supply 9,000 vehicles over the next five to seven years to replace the Army's ageing Land Rover-based fleet.

Lisa Brankin, chair of Ford UK, says it is a chance to showcase their abilities to respond quickly to defence needs: "As a manufacturer you look at every opportunity that comes at you and this is a great opportunity that we would love to take advantage of."

This is not the first time Ford has busied itself with defence work.

Ahead of World War Two, Ford's factory in Dagenham, east London, was the largest car plant in Europe.

When war broke out, civilian car assembly stopped completely, and the factory was converted entirely to military production. Between 1939 and 1945, the Dagenham plant built 360,000 vehicles for the Allied war effort.

Ford workers in Manchester manufactured 34,000 Rolls-Royce-designed Merlin engines, which powered Spitfires and Hurricane fighter planes.

Eighty years later, the UK and European car industries are hoping that the engines of war can help defend against what one supplier told the BBC was a "terminal decline".

As Europe feels compelled to commit hundreds of billions to ramp up defence spending in the face of the menace from Russia and US reluctance to be Europe's protector, car makers that are under commercial attack from Chinese rivals have taken notice.

So can the rearmament of Europe save an auto industry and a supply chain facing crisis?

Ford is far from the only car company that sees defence as a growth industry - and one that can utilise the growing overcapacity at car plants across Europe.

French car maker Renault has signed a strategic agreement with defence giant Thales to produce military drones - targeting an output of up to 1,000 units per month. The French military and Directorate General for Armament want to tap into Renault's mass-production capabilities to bypass traditional, slower defence supply chains.

Meanwhile, Volkswagen has agreed to sell an under-used factory in Osnabruck, western Germany, which will become a military manufacturing hub in a joint venture with an Israeli-based defence investor.

Jaguar Land Rover (JLR), which makes the Land Rover, is also bidding for the same contract as Ford - as the Army retires its existing Land Rover-based fleet by 2030. JLR has also established a new dedicated business unit to support its global military ambitions.

It makes sense for under-utilised auto manufacturing capacity to switch to defence, says Mike Hawes of the Society for Motor Manufacturers and Traders (SMMT) trade association.

The UK car industry and its suppliers are heavily reliant on a few big manufacturers – Nissan in Sunderland, Toyota in Derbyshire, BMW in Oxfordshire and the biggest of them all by value of output, JLR at multiple sites in the Midlands and Merseyside.

And Hawes says the supply chain is very vulnerable.

"UK automotive output has been in decline over the last eight or nine years," he says. "We're probably half of what we were 10 years ago. Now, that's obviously going to hit the supply chain because they're not making the same number of parts. So they've got capacity. They may be quite dependent on one particular manufacturer as well."

So they will welcome "the opportunity to broaden their customer base and potentially move into defence", he says.

Just two weeks ago, JLR announced it was cutting 4,000 jobs from its 30,000-strong UK workforce in order to reduce costs to stay competitive with international – particularly Chinese – rivals. Dave Roberts of the firm Evtec, which supplies cooling systems components to JLR, is worried about the implications of this.