GIAMM: State Will Lose Out if Automotive Component Factories Relocate

The Gabungan Industri Alat-alat Mobil dan Motor (GIAMM) considers that the state will suffer substantial losses if two Japanese automotive component companies relocate their factories from Indonesia to Vietnam. GIAMM Secretary General Rachmat Basuki stated that any resulting layoffs would also impact state revenue. “The state loses a lot from foreign exchange, worker and corporate taxes, besides the layoffs,” he said when contacted on Monday, 22 June 2026. Rachmat heard the news as conveyed by Labour Party President Said Iqbal the previous Sunday. The companies mentioned by Iqbal are reportedly focusing on electric vehicle components and consider Vietnam’s policies more supportive of the electric vehicle ecosystem. Rachmat said the companies, suspected to be affiliated with the Yazaki Group, produce wiring harnesses for cars. However, he confirmed that the Japanese firms, with the initials PT J and PT S, are not members of GIAMM. He expressed surprise that the growing electric vehicle market trend has not yet absorbed domestic components. “Because electric vehicles are mostly still CBU (completely built up) and simple assembly,” he said. Rachmat stressed the need for improvements in Indonesia’s investment climate, particularly for the automotive industry. “Many things need to be resolved, such as labour issues, productivity, and so on,” he stated. Previously, Labour Party President Said Iqbal said the two companies, operating in Mojokerto and Pasuruan, East Java, were planning to relocate. He noted that the relocation would be partial, not total, and that discussions were still in the early stages. Iqbal urged unions under the Indonesian Metal Workers Federation to negotiate with the companies, as thousands of employees face potential layoffs.