Business News 29/11/2023, 13:48

German businesses prioritize diversified production and manufacturing in Vietnam

Diversifying production and manufacturing is the most prioritized activity of German companies in Vietnam, with 42% of businesses having this plan.

German businesses prioritize diversified production and manufacturing in Vietnam

Based on surveys, the German Industry and Commerce in Vietnam (AHK) said that currently, businesses in this country intend to invest more in operations abroad than in the domestic market.

The agency also said that in response to the development of the global economy, many German businesses and closely related businesses continue to expand their business scale in many markets. Among them, Vietnam is currently considered a promising destination, trusted by many German businesses. 

Through the survey, 42% of German companies in Vietnam said they prioritize diversifying production and manufacturing. This shows a focus on product diversification strategy. In addition, sales and marketing, service, and logistics are also given importance, emphasizing the trend of comprehensive investment.

In the first 10 months of this year, AHK assessed that Germany has taken a strong step in consolidating its presence in Vietnam with 26 investment projects implemented, total capital of nearly 221.5 million USD.

According to statistical data of the General Department of Vietnam Customs, accumulated until the end of March this year, Germany had 443 FDI projects with a total registered capital of 2.36 billion USD, ranking 18th out of 143 countries and territories invested in Vietnam. Most German projects and investment capital focus on processing, manufacturing, technical services, information and communication, banking, and insurance industries.

Currently, 26 provinces and cities have received German FDI, mainly Ho Chi Minh City, Hanoi, Binh Duong, and Dong Nai. Many leading German corporations (Siemens, Metro, Mercedes-Benz, Deutsche Bank, Allianz, B.Braun, Messer...) have opened facilities and committed to long-term investment in Vietnam.

Besides the advantages, German companies in Vietnam also reflect that they are facing many huge challenges. Of these, 49% of businesses said the decline in global demand is a main barrier; 41% are concerned about the shortage of skilled labor; 37% of businesses emphasized the risk of supply chain disruption. In addition, there are other notable challenges such as economic development policies, energy costs, and financing challenges.

The World Bank's updated report on the morning of November 22 also assessed that Vietnam's FDI attraction activities remained stable in the context of global instability.

Accordingly, accumulated FDI commitments in the first 10 months of the year reached 25.7 billion USD, 14.7% higher than last year, mainly thanks to foreign investors' confidence in the stability and openness of Vietnam. Cumulative realized FDI capital reached 18 billion USD, up 3.2% compared to a year ago. Industrial production continues to be the main field attracting FDI into Vietnam.

Vnexpress/ Translator: Ngoc Mai
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