More than half of Japanese firms plan to expand in Vietnam: Survey

Customers shop at UNIQLO AEON Mall Long Bien (Photo UNIQLO)

Hanoi - More than 56% of the Japanese companies currently operating in Vietnam have said they plan to expand their operations in the next year or two, according to the latest survey by the Japan External Trade Organisation (JETRO).

This figure solidifies Vietnam's position in the top group of ASEAN markets where Japanese firms prioritise expanding their operations, driven by growing export demand and a robust recovery in the domestic market.

The survey also revealed that 64.1% of Japanese enterprises in Vietnam expect profits in 2024.

Looking ahead to 2025, optimism persists, with 50.4% of businesses forecasting improved conditions, while only 9.2% anticipate a downturn. For 2024 alone, 48.8% of firms expect profitability to improve, up 16.8% points from 2023.

Manufacturers attributed profit growth to increased export demand, while non-manufacturing businesses cited the recovery of domestic consumption.

Many Japanese firms aim to expand their sales functions in Vietnam, with 62.2% driven by growth in export demand and domestic purchasing power. It reflects the dual role of Vietnam as a production hub and a growing consumption market for Japanese products and services.

Although Vietnam's salaries are in the average range for the region, the 5.4% salary growth in 2024 stands out as one of the highest. It signals competition for top talent, especially in the non-manufacturing sector where regional salary gaps are narrowing.

JETRO noted that this preliminary report focuses on business profit outlooks, future expansion plans and wages. Additional details, including production shifts, competitive dynamics and trade activities, will be released in January 2025.

According to the Ministry of Planning and Investment, Japan ranked fifth among 110 countries and territories investing in Vietnam in the first 11 months of 2024, with registered capital exceeding 3.61 billion USD, accounting for nearly 11.5% of total foreign investment./.