SWOT Analysis – Vietnam Industrial Manufacturing Sector (2025)

Strengths

• Competitive labor cost: Despite rising wages, Vietnam remains cheaper than some countries in ASEAN.
•  Strategic location: Proximity to ASEAN, and major shipping routes makes it ideal for manufacturing and export.
• Free trade agreements: Participation in CPTPP, EVFTA, and RCEP facilitates access to global markets with tariff advantages.
•  Rapidly growing industrial zones: Expanding infrastructure in Long An, Bac Ninh, Hai Phong, and Binh Duong.
• Stable FDI inflows: Global giants like Samsung, Foxconn, Lego, LG, and Panasonic continue to expand operations.

Weaknesses

• Shortage of skilled labor: Especially in high-tech industries and automation.
• Underdeveloped infrastructure: Ports and rail systems are inadequate, increasing logistics costs.
• Lack of domestic supporting industries: Heavy reliance on imported components and materials.
• Complex administrative procedures: Lengthy permit processes for construction, environment, fire safety, etc.

Opportunities

•  Global supply chain shift from China: Vietnam is a top choice in Asean 
• Demand for green and high-tech production: Opens doors for clean energy and smart manufacturing investment.
• New investment incentives: Government reforms target high-tech, electronics, healthcare, and renewable sectors.
• Growing domestic consumption: A young, expanding middle class drives demand for locally produced goods.

Threats

• Geopolitical and tariff risks: Potential for U.S. tariffs if Vietnam is seen as circumventing Chinese exports.
• Regional competition: Indonesia, India, and the Philippines are aggressively attracting FDI.
• Electricity shortages: Northern industrial zones have experienced blackouts, affecting production.
• Digital transformation pressure: SMEs lack capital and skilled staff to adopt Industry 4.0 technologies.