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German companies in Vietnam look to diversify supply chain due to Covid

By Dat Nguyen   September 7, 2021 | 06:32 pm PT
German companies in Vietnam look to diversify supply chain due to Covid
A ship docks at the Tan Cang Cai Mep Terminal in Ho Chi Minh City in March 2021. Photo by VnExpress/Huu Khoa
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 are 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 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 enquiry by DIHK, which polled 3,000 business leaders from Jul. 22 to Aug. 9.

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