Despite global tariff uncertainty and shifting supply chains, Vietnam’s manufacturing sector continues to show strong potential, said Truong Thi Chi Binh, Vice President of the Vietnam Association for Supporting Industries (VASI), at the M-TALKS 2025 forum on July 24.

She revealed that some foreign-owned manufacturers had previously considered moving part of their operations to Mexico due to the possibility of reciprocal tariffs.

"Despite potential political shifts in the US, companies have remained in Vietnam because supply chains take years to build and require long-term stability. In Southeast Asia, Vietnam continues to be seen as a reliable and trusted manufacturing hub," said Binh. 

She added that the government is stepping up efforts to monitor product origins, impose anti-dumping duties on imported steel, and increase purchases of US goods as part of broader trade strategy adjustments.

From  assembly to original manufacturing 

Themed “Unlocking Vietnam’s Industrial Breakthrough: From Manufacturing to Strategic Value in a Shifting Global Supply Chain," the forum gathered insights from experts and businesses on how Vietnam can upgrade its position in the global value chain.

At the forum, experts said that, as global supply chains continue to evolve, Vietnam’s manufacturing industry must urgently transition toward producing component clusters and mastering OEM (original equipment manufacturing), with the long-term goal of achieving ODM (original design manufacturing) and OBM (original brand manufacturing) capabilities.

“This is how Vietnamese firms can gain a stronger voice in the supply chain and attract major buyers,” said the VASI vice president.

She noted that, in May, a US business delegation visited to explore relocating up to 30% of their production volume to Vietnam if local suppliers could meet demand. "These opportunities exist, but so do immense pressures," said Binh.

According to data from the General Statistics Office, 78.4% of surveyed manufacturing enterprises reported stable or rising new orders in the second quarter. Meanwhile, 81.8% expect export orders to remain steady or increase in the third quarter.

The Ministry of Finance’s Foreign Investment Agency reported that foreign direct investment (FDI) into manufacturing reached nearly US$12 billion in the first half of 2025, up 3.9% year-on-year and accounting for the largest share of new projects and capital adjustments.

According to the United Nations Industrial Development Organization (UNIDO) data, Vietnam’s manufacturing value added as a percentage of GDP reached 26.3% by 2023, approaching China’s 28.6%. However, Binh said that most local firms remain at the basic processing level, falling short of true OEM capabilities.

"In Vietnam, many businesses claim to do OEM, but few meet the full criteria. Most stop at assembling single parts. Only a handful can produce component clusters,” she explained.

Building capabilities: from R&D to customer insight 

Tran Binh Minh, Co-founder and Deputy General Director of GCool, a company that specializes in ODM ceiling fans, pointed out the importance of research and development (R&D). “We invest heavily in R&D and are willing to pay top salaries to recruit highly-qualified experts from the US to work on core technology,” he said. The company now holds over 20 design patents and offers custom-built OEM services.Meanwhile, Ho Ngoc Toan, Deputy General Director of Automech JSC, said that success comes down to quality and delivery. "We built design capabilities step by step, starting with mold-making and developing complete product clusters," he said.

Experts also urged firms to improve soft skills, sales, customer service, marketing, and market understanding.

Le Nguyen Duy Oanh, Deputy Director of the Ho Chi Minh City Center for Supporting Industries Development, urged firms to “know their customers.” She advised suppliers to proactively understand their clients' core businesses and products.

Besides, Tran Quynh Huong, Head of Sourcing and Supply Chain Consulting at Source of Asia and FDI–ESD Director, noted that Vietnamese firms still lag behind their Malaysian and Thai competitors.

She added that some Vietnamese suppliers fail to make the buyers’ shortlist due to missing certifications and an inability to provide detailed price breakdowns.

"When quoting for FDI clients, it's crucial to break down cost structures, including labor, raw materials, and material source dependency," she said.

Hanoi times