Govt denies relocation of two automotive component firms to Vietnam

Jakarta (ANTARA) - The Ministry of Industry has dismissed rumors that automotive component manufacturers PT JAI and PT SAI plan to relocate their operations from Indonesia to Vietnam, affirming that both companies continue to operate normally.

Following a rapid internal investigation, Ministry spokesperson Febri Hendri Antoni Arif confirmed that reports of relocation and widespread layoffs were entirely unfounded.

“There are no plans to relocate the production facilities of PT JAI and PT SAI from Indonesia to Vietnam. Secondly, there have been no workforce reductions or layoffs at the two industrial companies,” Febri said on Tuesday.

The issue prompted immediate action from Industry Minister Agus Gumiwang Kartasasmita, who instructed the ministry’s Directorate General of Metal, Machinery, Transportation Equipment and Electronics (ILMATE) to verify the reports over the weekend, citing the sensitivity of industrial stability and foreign direct investment in Indonesia’s automotive sector.

The investigation focused on PT JAI in Pasuruan District and PT SAI in Mojokerto District, both located in East Java Province.

Data from the National Industrial Information System (SIINas) show that both manufacturers remain fully operational and compliant with Ministry of Industry Regulation No. 13 of 2025.

Although the reports proved to be false, Febri acknowledged that the speculation had already disrupted the companies’ supply chains. Several international buyers and suppliers sought clarification regarding the accuracy of the reports and requested assurances about the continuity of long-term manufacturing contracts.

“The widespread coverage of the relocation and layoff rumors has affected the automotive industry supply chain and the investment climate in Indonesian manufacturing,” Febri said.

The ministry’s review also highlighted the companies’ long-term commitment to Indonesia. Combined realized investment by PT JAI and PT SAI exceeds Rp1.9 trillion (approximately US$105,99 million).

Production performance at both companies remains strong. During the first quarter of 2026, PT SAI produced 1.2 million components, while PT JAI recorded output of approximately 1.6 million components.

Both manufacturers are fully export-oriented and serve as important links in the global automotive supply chain.

In response to the incident, Minister Kartasasmita has instructed ministry officials and regional governments nationwide to intensify routine monitoring of industrial activities.

Authorities have also been directed to implement early mitigation measures whenever signs of supply chain disruptions emerge in order to prevent actual factory closures or job losses.

“The government will continue to monitor and coordinate with industry players to ensure investment sustainability, production stability, demand certainty, and protection for the national industrial workforce,” Febri said.

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Translator: Ahmad Muzdaffar Fauzan, Yashinta Difa

Editor: Primayanti

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