More than 64 per cent of Japanese surveyed companies in Vietnam are expected to achieve profitability in 2024, an increase of 9.8 percentage points compared to the previous year, according to the “Survey on the Business Conditions of Japanese Companies Abroad for Fiscal Year 2024,” made by the Japan External Trade Organization (JETRO)  across 20 countries and territories in the Asia-Pacific region.

The survey, conducted from August to September 2024, gathered responses from 5,007 Japanese companies, including 863 in Vietnam. 

This marks the first time in five years since the pre-Covid-19 period that the number of Japanese profitable enterprises in Vietnam reached such a high proportion. 

Majority of Vietnam-based Japanese enterprises under the survey showed positive responses. 

Among manufacturing companies, 70.2 per cent anticipate profitability in 2024, up 8.7 percentage points from the previous year. This improvement is primarily attributed to increased demand in export markets and the domestic market.

Meanwhile, 57.9 per cent of non-manufacturing companies expect to turn a profit in 2024, up 11.2 percentage points from last year. The main reason cited by these companies for their improved profit outlook is also the "increased demand in export markets and the domestic market."

Moreover, 48.8 per cent of Japanese companies in Vietnam indicated that their business performance in 2024 would improve compared to 2023, up 16.8 percentage points from the previous year. 

Looking ahead to 2025, 50.4% of Japanese companies in the country projected further improvements in profitability compared to their expectations for 2024. Many businesses continue to express optimism about achieving favorable results, building on their performance in 2024.

Over the next 1-2 years, 56.1 per cent of Japanese businesses in Vetnam indicated plans to “expand” their operations in Vietnam. Among them, manufacturing companies accounted for 48.1 per cent, an increase of 1 percentage point from the previous year, while non-manufacturing companies made up 63.2 per cent, a decrease of 2.3 percentage points.

The proportion of Japanese companies planning to “expand” in Vietnam remains among the highest in ASEAN. However, 2.8 per cent of respondents stated they would “downsize” their operations, a rise of 1 percentage point from the previous year, while only 0.3 per cent indicated plans to “withdraw or relocate to a third country,” a decrease of 0.4 percentage points from last year.

Despite some fluctuations, Japanese companies’ ambition to expand in Vietnam remains stable, solidifying the country’s position as a leading destination in ASEAN for Japanese investment growth.