Top destinations in the global manufacturing relocation trend

Riotimesonline.com (Brazil) recently published an article about the rapidly changing global manufacturing situation, citing recent data from the world's leading financial information service provider S&P Global Market Intelligence (USA), which said that Vietnam has become the top destination for companies to shift production to ensure uninterrupted supply chains.

Vietnam has surpassed Mexico to become the leading country in the "nearshoring" trend. Illustrative photo.

According to data from S&P Global Market Intelligence, Vietnam has surpassed Mexico to become the leader in the "nearshoring" trend (companies moving production, services and logistics activities from a distant country to neighboring countries).

Proof is that Samsung Group has invested heavily in electronics factories in Vietnam.

Nike and Adidas are also moving production to Vietnam.

Intel also established a large-scale presence with a chip factory in Ho Chi Minh City.

More than 35% of Vietnamese companies reported increased demand from multinational manufacturers in the past year, compared to 15% in Mexico. The survey, conducted in May 2024, shows that Vietnam is increasingly attractive to international businesses.

The article points out that Vietnam has several advantages such as its geographical location with easy access to major markets in Asia; its labor costs remain highly competitive, thus attracting companies that want to optimize costs. In addition, the Vietnamese government has implemented many policies to support foreign investment.

According to the article, Vietnam’s workforce plays a key role in this success story, being a key factor for companies considering relocating their production sites. Vietnam ranks 9th out of 60 countries in the ManpowerGroup (US) Total Human Capital Index, showing that Vietnam possesses a reliable and highly skilled workforce.

Mexico has also benefited from the “nearshoring” trend, but has seen slower growth. Some companies have seen increased sales due to the trend, but the overall impact has not been as pronounced as in Vietnam. Mexican manufacturers remain optimistic about future growth opportunities. The window of opportunity for countries to capitalize on the trend is limited. Experts estimate the investment transition period to be 10-12 years. This time frame increases competition among emerging manufacturing hubs. Countries need to act quickly to attract and retain these investments.

Source: https://baoquangninh.vn/diem-den-hang-dau-trong-xu-huong-dich-chuyen-san-xuat-toan-cau-3330231.html