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ASEAN – Opportunities and Challenges

The ASEAN region is fragmented and the markets are developed to different degrees. Each country brings its own special features, so that it is necessary to deal intensively with each target market. The event “The ASEAN States – Opportunities and Challenges for Mechanical Engineering in NRW” on October 26, 2022, dealt with the heterogeneous as well as dynamic economic area of the ASEAN states and their special features, challenges and opportunities for mechanical engineering.

In 2021, Germany exported machinery and equipment worth around 4.4 billion euros to the ASEAN region. Machinery exports from North Rhine-Westphalia to ASEAN have been declining since 2017 and stood at around 750 million euros in 2021. Whereas machinery imports from ASEAN to North Rhine-Westphalia have been on the rise again since 2020 and stood at around 1.2 billion euros in 2021.

In her presentation “ASEAN countries – facts & figures on mechanical engineering”, Monika Hollacher, VDMA foreign trade officer, presented the importance of the ASEAN market for German mechanical engineering as well as results of her VDMA survey “ASEAN – future markets for European mechanical engineering?”. For German machinery exports, Singapore, Thailand, Vietnam, Malaysia and Indonesia are among the most important countries among the ASEAN states. The market volume for mechanical engineering in ASEAN has almost doubled from 2011 to 2019, with a slight decrease in 2020.

The statistics of exported machinery to ASEAN countries from major machinery suppliers show that China is the biggest winner of growth in Southeast Asia. Its exports to ASEAN countries are growing steadily, whereas Singapore, Korea, the US and Germany are roughly tied, and Japan has even lost share. According to the VDMA survey, 35 percent of respondents currently attribute little or no importance to ASEAN. China remains by far the most important market in Asia, followed by India. However, around 50 percent of respondents rate the future importance of ASEAN as high or very high. Opportunities are seen in future free trade agreements between the EU and ASEAN / the EU and individual ASEAN states, among other things. The respondents see the risks and challenges, for example, in the strong Asian competition with high competitive pressure, in the strong fragmentation of the region and also in tariff and non-tariff trade barriers.

Frank Malerius, Representative Indonesia, German Trade & Invest, delved into the facts about ASEAN as a business location. He discussed the advantages and disadvantages of the individual countries. For example, Singapore is characterized by a high level of education, outstanding bureaucracy and free trade, but it is a small market and labor is relatively expensive. Malaysia and Thailand offer advanced industrialization, an existing supply structure, and represent an overall good investment environment, but wages are rising here as well. Indonesia, Philippines and Vietnam score high on growth rates and growing consumer markets, but represent a difficult investment environment and with low education levels (except Vietnam). In Myanmar, Laos and Cambodia, wages are low and aspirations for prosperity are high. However, these countries have difficult conditions for investment and poor infrastructure.

Finally, Lukas Viebrock, Regional Sales Development Manager Asia, CLAAS Regional Center South East Asia reported on his experiences in the ASEAN region. After a market analysis, the agricultural machinery manufacturer CLAAS decided to open a sales office in Bangkok, Thailand. For CLAAS, the location will enable a stronger support of sales partners in the individual SEA countries. Bangkok was chosen as the hub because of its high agricultural importance and its convenient distance to CLAAS’ other markets. Other factors in the decision were the very active contact with the foreign chamber of commerce, the visa situation for Thai employees and the small cultural distance of Thailand to some of the other ASEAN countries. Lukas Viebrock went on to present the challenges and opportunities of the market as well as the projects at CLAAS in the region.

The conclusion of the event: ASEAN is an attractive market for the future of mechanical engineering.


The event was offered by ProduktionNRW. ProduktionNRW is the competence network for mechanical engineering and production technology in North Rhine-Westphalia and is run by VDMA NRW. ProduktionNRW sees itself as a platform for networking, informing and marketing companies, institutions and networks among themselves and along the value chain. Significant parts of the services provided by ProduktionNRW are funded by the European Regional Development Fund (ERDF).