Competing on value, not cost: Why Singapore appeals to German manufacturers

[HANNOVER] When Siemens announced plans in 2023 to build a 200-million-euro (S$299 million) digital factory in Singapore, the move prompted questions over why it would choose to manufacture in one of Asia’s more expensive business hubs.

But for the German engineering giant, the decision was not so much about labour costs. Rather, it valued the access to skilled talent, supply chain resilience and Singapore’s role as a regional hub for advanced manufacturing and industrial innovation.

The move reflects a broader shift among some German industrial firms, which increasingly view Singapore not just as a sales outpost, but also as a base to serve the rest of South-east Asia.