The AHK World Business Outlook - Spring 2025, recently released by the German Chamber of Commerce and Industry in Vietnam (AHK Vietnam), shows that German companies in Vietnam see both opportunities and risks, navigating local challenges while benefiting from Vietnam’s increasing relevance in global supply chains.

Despite ongoing global disruptions, 54% of German companies in Vietnam expect their business performance to improve over the next year. 80% rate 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.

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

Highlighting challenges, the AHK report said that 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. In addition, these concerns are further complicated by sudden policy changes, unclear legal environments and rising raw material costs, which have intensified since the pandemic.

However, Vietnam’s positioning as a neutral, ASEAN-based production hub offers an excellent opportunity. Boosted by the EU-Vietnam Free Trade Agreement (EVFTA), more companies are looking to deepen their business commitment in Vietnam, not just as a consumer market but as a strategic partner in their global supply chain strategies.

Furthermore, Germany-Vietnam economic relations have remained strong in recent years. In 2024, bilateral trade exceeded €18.8 billion (approximately US$20.4 billion), and German companies continued to invest in promising sectors like renewable energy, automation and vocational training.

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

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

According to AHK, 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.