Govt Denies Automotive Firms’ Relocation to Vietnam

RRI.CO.ID, Jakarta - The Indonesian Ministry of Industry has confirmed that two automotive component manufacturers, PT SAI and PT JAI, remain fully operational. The clarification follows reports alleging relocation of production facilities to Vietnam and potential layoffs at both companies.

“Based on our verification, we have tentatively concluded that, first, there are no plans to relocate the production facilities of PT JAI and PT SAI from Indonesia to Vietnam. Second, there are no workforce reductions or layoffs at these two companies,” said Ministry spokesperson Febri Hendri Antoni Arief in Jakarta, as quoted on the ministry’s official website on Wednesday, June 24, 2026.

The investigation, ordered by Industry Minister Agus Gumiwang Kartasasmita on June 21, was carried out by the Director General of Metal, Machinery, Transportation Equipment, and Electronics Industries (Dirjen ILMATE).

Findings confirmed that PT JAI and PT SAI operate in East Java, specifically in Pasuruan and Mojokerto regencies, and continue to submit regular reports through the National Industrial Information System (SIINas) in line with prevailing regulations.

Despite this, the rumors caused confusion among global buyers and suppliers, with several industry partners questioning the certainty of contracts and production continuity. “The widespread reports of relocation and layoffs have disrupted the supply chain and raised concerns over Indonesia’s manufacturing investment climate, particularly in the automotive component sector,” Febri noted.

Both companies have invested more than IDR 1.9 trillion (approximately USD 105.83 million) and are fully export-oriented, underscoring their role in strengthening Indonesia’s manufacturing industry. “The realized investment reflects the companies’ confidence and commitment to continue expanding their businesses in Indonesia,” Febri added.

Performance remains solid. In the first quarter of 2026, PT SAI produced 1.2 million component units, while PT JAI manufactured around 1.6 million units. All output is directed to the global export market, making the firms integral to the international automotive supply chain.

The Ministry has instructed its officials nationwide to intensify monitoring of industrial performance and swiftly address any disruptions to supply chains or demand. Preventive measures are being prioritized to safeguard production activities and protect workers.

“The Minister has ordered routine oversight and rapid mitigation to ensure business stability and avoid closures or layoffs,” Febri emphasized.

The government reaffirmed its commitment to maintaining a conducive business climate, ensuring investment continuity, production stability, demand certainty, and workforce protection. Authorities pledged to keep Indonesia’s manufacturing sector competitive and adaptive to global market dynamics. ***