German companies in Vietnam look to diversify supply chain due to Covid
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Ninety percent of German companies in Vietnam are seeking new or additional suppliers in Asia Pacific due to mobility restrictions in the country.
The majority of respondents, 83 percent, reported supply bottlenecks and price increases caused by transport problems, according to a survey by the Association of German Chambers of Industry and Commerce (DIHK).
What has led to the current transport problems is a lack of freight capacity and containers.
Other issues that caused supply bottlenecks are increased demand or insufficient production capacity (67 percent) and halted supplier production (58 percent).
The impacts of supply bottlenecks on German companies are longer waiting times, higher purchase prices, and production halts or downsizing, according to 58 percent of respondents.
Half of the respondents have no choice but to either increase or plan to increase the manufacturing prices of their products.
Two-thirds of German companies are also considering relocating their production to the E.U.
The Vietnam survey is part of the global inquiry by DIHK, which polled 3,000 business leaders from Jul. 22 to Aug. 9.
Questions & Answers
Q.What are the main issues causing the current transport problems for German companies in Vietnam?
What are the main issues causing the current transport problems for German companies in Vietnam?
The primary causes of the transport problems are a lack of freight capacity and insufficient containers. These issues have contributed to supply bottlenecks reported by 83 percent of respondents.
Q.What proportion of German companies in Vietnam are considering moving their production to the E.U.?
What proportion of German companies in Vietnam are considering moving their production to the E.U.?
Two-thirds of German companies surveyed in Vietnam are considering relocating their production facilities to the European Union. This move is likely a response to ongoing supply chain disruptions.
Q.How are the supply bottlenecks affecting the operations of German companies in Vietnam?
How are the supply bottlenecks affecting the operations of German companies in Vietnam?
Supply bottlenecks are causing longer waiting times, higher purchase prices, and production halts or downsizing for 58 percent of German companies. Half of them are also increasing or planning to increase product prices.
Q.When was the survey conducted by the Association of German Chambers of Industry and Commerce?
When was the survey conducted by the Association of German Chambers of Industry and Commerce?
The survey was conducted between July 22 and August 9. It polled 3,000 business leaders globally, with the Vietnam data forming part of this wider inquiry.
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