AHK World Business Outlook Spring 2025 - Vietnam Results

German Firms in Vietnam: Navigating Through a Shifting Landscape

Ho Chi Minh City, April 24, 2025 – German firms worldwide are adapting to new tariffs and global dynamics, and their counterparts in Vietnam are also navigating these changes with a balanced outlook. According to the latest AHK World Business Outlook – Spring 2025, companies see both opportunities and risks, navigating local challenges while benefiting from Vietnam’s increasing relevance in global supply chains.

Resilience in Uncertain Times

Despite ongoing global disruptions, 54% of German companies in Vietnam expect their business situation to improve over the next year. While the AHK World Business Outlook – Spring 2025 survey was conducted around the time of the U.S. tariff announcement, many respondents had yet to fully factor in its potential impact. Nevertheless, the results reflect Vietnam’s enduring attractiveness in an increasingly volatile global landscape.

A solid 80% rated their current business situation as “good” or “satisfactory,” underlining a relatively stable operating environment. Confidence is also seen in forward-looking decisions: 38% of companies plan to increase their investments, while 43% expect their workforce to grow in 2025.

These figures reinforce Vietnam’s dual role as a manufacturing stronghold and a strategic alternative hub for German businesses repositioning within the Indo-Pacific.

Demand, Policy & Fair Play: The Top Challenges

Still, companies are navigating a complex local landscape. The three most frequently cited challenges are:

• Fluctuating Demand: German companies in Vietnam may not be directly affected by declining U.S. demand, but many rely on suppliers or partners serving the U.S. market. This indirect exposure creates uncertainty in forecasting, planning, and expansion, especially in manufacturing and trade.
• Economic Frameworks: Sudden policy changes and unclear legal environments make long-term decision-making difficult for foreign firms.
• Unequal Treatment in Trade: Some companies face unfair competition, with local firms receiving more favorable treatment. Rising import taxes also impact those delivering goods directly to customers abroad, including handling all costs and logistics.

These concerns are further complicated by supply chain disruptions and rising raw material costs, which have intensified since the pandemic.

Global Headwinds, Local Opportunity

At a global level, companies cite decoupling, trade conflicts, and inflation as major obstacles, along with the need to diversify supply chains and keep pace with AI-driven transformation. One respondent warned, “Our exports to the US will be affected heavily by taxes,” highlighting the interconnected nature of local operations and global shifts.

However, Vietnam’s positioning as a neutral, ASEAN-based production hub offers a real opportunity. In light of the EU-Vietnam Free Trade Agreement (EVFTA), more firms are looking to deepen their commitment here, not just as a market, but as a strategic partner in their global supply chain strategies.

Bilateral Growth and Big Moves

German-Vietnamese economic relations remain strong. In 2024, bilateral trade exceeded €18.8 billion (approximately $20.4 billion), and German companies continue to invest in high-potential sectors like renewable energy, automation, and vocational training.

Several German companies also actively expanded their presence in Vietnam last year. Ziehl-Abegg opened a $20 million factory in Dong Nai for ventilation and drive technology, while Kärcher launched a $19.4 million plant in Quang Nam for cleaning equipment. Lately, the Südwolle Group officially opened its new dyeing plant in Ninh Thuan, valued at $21 million.

Although not a German name, LEGO's recent inauguration of its second factory in southern Vietnam has also driven German inquiries and interests in the Vietnamese market.

Looking Ahead

Currently, Vietnam presents a mix of stability and opportunities for growth. With a well-informed strategy and the right partnerships, German firms can turn today’s challenges into tomorrow’s opportunities. AHK Vietnam and the German Business Association (GBA) remain committed to supporting the community through advocacy, insights, and practical tools to thrive in this evolving market.

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About the AHK World Business Outlook (AHK WBO)

The AHK World Business Outlook (AHK WBO) is based on an annual survey by the German Chambers of Commerce and Industry (DIHK), involving German companies in the network of the German Chamber of Commerce Abroad, delegations, and representative offices (AHK).

With active participation from German companies in Vietnam and globally, the AHK WBO is highly regarded by economic policymakers, business leaders, media, and experts. It serves as a barometer of German business confidence in Vietnam, the region, and worldwide. The survey results guide evaluations of the development status of German businesses, trends over the next 12 months, investment plans, hiring plans, and German investors' macroeconomic expectations for Vietnam.

Survey period: from March 17 until April 14, 2025

Delegation of German Industry and Commerce in Vietnam (AHK Vietnam)

The Delegation of German Industry and Commerce in Vietnam (AHK Vietnam) is a part of the global network of German Chambers of Commerce Abroad (AHKs) in 150 locations in 93 countries, affiliated with the German Chambers of Commerce and Industry (DIHK) in Berlin, supported by The Federal Ministry for Economic Affairs and Climate Action (BMWK). Since 1994, we have served as a vital link for businesses, fostering bilateral trade and investment between Germany and Vietnam while acting as your bridge-builder and problem-solver.