Aspects influencing German firms' investment decisions in Vietnam

DNHN - When queried about the determinants that influence investment choices, 50% of German enterprises operating in Vietnam cited the expansion prospects of the Vietnamese market as a significant element.

As per the most recent survey conducted by the German Chamber of Industry and Commerce (AHK) Vietnam, additional determinants including expeditious localization and customer engagement are deemed significant.

German businesses demonstrate their keen interest in the Vietnamese market by adapting their strategies to align with the evolving dynamics of market development. Additionally, skilled labor is held in high regard, as 37% of businesses place significant importance on the essential nature of professional qualifications.

In Vietnam, 42% of German companies with investment objectives prioritize manufacturing and production diversification. In addition to service and logistics, sales and marketing are prioritized, and a holistic approach to business development is emphasized.

From the commencement of the year until the conclusion of October 2023, Germany has made substantial strides in solidifying its foothold in the Vietnamese market. German enterprises have demonstrated their confidence and commitment to the Vietnamese market through the implementation of 26 investment projects totaling over 221 million USD in investment capital.

The survey also highlighted the "China +1" trend, which German companies in Vietnam are implementing with an emphasis on green investment initiatives. According to AHK's evaluation, the Vietnamese market is receptive and supportive of such ventures, as it offers a solid groundwork for expansion, diversification, and the execution of sustainable business practices.

Nevertheless, the survey also highlights the obstacles that German companies that are present in Vietnam encounter, such as diminished worldwide demand, scarcity of proficient labor, and potential disruptions in the supply chain. Furthermore, economic development policies, energy costs, and financing obstacles are additional challenges.

Thanh Ha