We present results from consistent dynamo simulations, where the electrically conducting and incompressible flow inside a cylinder vessel is forced by moving impellers numerically implemented by a penalization method. The numerical scheme models jumps of magnetic permeability for the solid impellers, resembling various configurations tested experimentally in the von-Karman Sodium experiment. The most striking experimental observations are reproduced in our set of simulations. In particular, we report on the existence of a time averaged axisymmetric dynamo mode, selfconsistently generated when the magnetic permeability of the impellers exceeds a threshold. We describe a possible scenario involving both the turbulent flow in the vicinity of the impellers and the high magnetic permeability of the impellers.PACS numbers: 47.27.E-,47.11. Kb,47.27.ek, Introduction: Nearly a century ago, Larmor suggested that the dynamo effect, an instability converting kinetic energy into magnetic energy, could be at the origin of most astrophysical magnetic fields. The experimental observation of the dynamo instability has been a long quest requiring careful flow optimization, and has only been achieved in the Riga [1], Karlsruhe [2] and von Kármán sodium (VKS) [3] experiments. While the behavior of the two former experiments could be explained from computations using simplified flows, this is not the case for the VKS experiment -in which a strongly turbulent liquid sodium flow is driven by the counter-rotation of impellers fitted with blades in a cylindrical vessel. Two major puzzles in the understanding of the dynamo mechanism are still unanswered: (i) the dynamo instability was only observed in the presence of impellers having high magnetic permeability [4] and (ii) the time-averaged dynamo magnetic field in the saturated regime has an axial dipolar structure [5], while an equatorial dynamo dipole is expected from computations in the growing phase of the instability using the time-averaged axisymmetric flow [6].