German businesses in Việt Nam navigate global shifts with resilience and optimism

German businesses in Việt Nam navigate global shifts with resilience and optimism

German businesses in Việt Nam have maintained optimism and a long-term commitment to the Vietnamese market despite facing numerous challenges, experts said.

A GBA delegation participates in a conference on building regional and international financial centres in Việt Nam. — Photo courtesy of German Business Association

In its latest media update, the German Business Association (GBA) expressed confidence in the country's resilience and promising investment prospects.

“The continuous efforts to sustain operations, promote co-operation, and engage in sustainable development initiatives have affirmed Việt Nam's position as a strategic investment destination. With a stable political environment, a rapidly developing economy, and reforms in investment policies, Việt Nam continues to be the preferred choice for German companies in expanding and strengthening their presence in the Asian region,” the association stressed.

In a recent survey by AHK World Business Outlook Spring 2025, companies recognised both opportunities and risks in Việt Nam, navigating local challenges while capitalising on the country's increasing role in global supply chains. 

Despite the timing of the survey coinciding with the announcement of US tariffs, many respondents had not fully assessed their potential impact. Nevertheless, the results underscore Việt Nam's enduring appeal in an evolving global landscape. 

The survey revealed that German companies worldwide are adjusting to new tariffs and global dynamics, with their counterparts in Việt Nam adopting a balanced outlook amidst changing circumstances. Despite ongoing global disruptions, 54 per cent of German companies in Việt Nam expect an improvement in their business situation within the next year. 

A significant 80 per cent rated their current business situation as either "good" or "satisfactory," highlighting a relatively stable operating environment.

Confidence is also seen in forward-looking decisions, with 38 per cent of companies planning to increase their investments, while 43 per cent expect their workforce to grow in 2025.

During the first months of the year, German businesses in Việt Nam continued to demonstrate strong engagement, strategic adaptability, and a long-term commitment to Việt Nam’s dynamic economy. 

The GBA reported maintaining strong connections with the international business community and local authorities in Việt Nam through significant events. Various business meetings were organised in both Germany and Việt Nam, reaffirming the long-term strategic presence of German businesses and the GBA's commitment to sustainable development in Việt Nam.

The confidence of German companies in Việt Nam's long-term prospects is attributed to factors such as a growing middle class, expanding domestic market, a stable political environment, improving macroeconomic indicators, ongoing efforts to enhance digital infrastructure, and green transition policies.

Amidst the economic landscape in Germany and the EU, characterised by high energy costs, geopolitical uncertainties, and moderate GDP growth, German businesses are reevaluating supply chains and diversifying away from regions with risks.

Việt Nam is increasingly seen as a secure and strategic choice for production, sourcing, and regional operations, particularly amidst new trade measures such as US tariff increases and shifts in EU policies. 

Despite the positive outlook, German businesses encounter persistent obstacles affecting their operations and competitiveness, including regulatory inconsistencies, administrative inefficiencies, changes in US tariff policies on goods from Việt Nam, human resource constraints, and local content and licensing requirements.

German-Vietnamese economic relations remain strong. 

In 2024, bilateral trade exceeded 18.8 billion euros (US$20.4 billion), and German companies continue to invest in high-potential sectors like renewable energy, automation, and vocational training.

Last year, several German companies also actively expanded their presence in Việt Nam. 

Ziehl-Abegg opened a $20 million factory in Đồng Nai for ventilation and drive technology, while Kärcher launched a $19.4 million plant in Quảng Nam for cleaning equipment. Lately, the Südwolle Group officially opened its new dyeing plant in Ninh Thuận, valued at $21 million. 

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