State Palace Reveals Japanese Automotive Factories in East Java Will Not Relocate to Vietnam, Here's Why
State Secretary Minister Prasetyo Hadi has revealed that a Japanese automotive component company or factory in East Java will not be relocating to Vietnam after all. Prasetyo received a report confirming no relocation from the relevant ministry, which had deployed teams directly to the field to inspect the two automotive component factories.
“Alhamdulillah, it was reported earlier by colleagues who went down to the field that the relocation plan can be postponed for the time being, meaning there will be no move to Vietnam,” Prasetyo told reporters at the Senayan Parliament Complex in Jakarta on Friday, 26 June 2026.
Prasetyo, who has also been appointed as the Head of the Layoff Mitigation Task Force, has begun mitigating layoff issues within companies. He stressed that the task force will conduct early detection and seek solutions if the two Japanese automotive component companies were to relocate their factories to Vietnam, as a wave of layoffs would occur if they left Indonesia.
“This is one of the tasks of the disaster mitigation task force team: to strive to detect issues as early as possible, to mitigate as early as possible, and to find solutions to emerging problems,” Prasetyo stated. “Because the two automotive companies were moving due to the principal or investor deciding to reduce or relocate their investment.”
The issue of relocating automotive component factories from Indonesia to Vietnam had drawn the attention of industry players in recent days. The news even sparked speculation regarding the potential for layoffs and a reduction in investment in the domestic automotive manufacturing sector.
Responding to the circulating information, the Ministry of Industry immediately conducted an investigation into the two companies alleged to be involved in the reports. The results confirmed that the production facilities of both companies are still operating normally in Indonesia.
Ministry of Industry spokesperson Febri Hendri Antoni Arief stated that the ministry had obtained direct confirmation from the companies in question. Based on the field checks, there are currently no plans to relocate production facilities to Vietnam.
“Based on the results of tracing the truth of this information, we at the Ministry of Industry have tentatively concluded that, firstly, there is no plan yet to relocate the production facilities of PT. JAI and PT. SAI from Indonesia to Vietnam. And secondly, there is no reduction in the workforce or layoffs at these two industrial companies,” he said.