Two Japanese Auto Parts Factories May Exit Indonesia, 7,000 Jobs at Risk
The threat of layoffs is once again looming over the national manufacturing sector. This time, potential job losses are emerging from the automotive components industry, as two companies affiliated with a Japanese automotive group are reportedly considering moving their production lines from Indonesia to Vietnam.
The two firms are believed to be component manufacturers with the initials PT J and PT S, both having parent companies in Japan. According to information received, PT J currently employs around 7,000 workers. Thousands of these employees could potentially be affected if the relocation proceeds.
“It’s likely still just talk, around 4,000. But I’m not so sure about 4,000, because it’s still just talk. Management usually takes a high estimate, so it could be in the thousands, but not 4,000,” said the President’s Special Adviser for Employment and Workers’ Welfare, who is also President of the Confederation of Indonesian Workers’ Unions (KSPI), Said Iqbal, after the KSPI 2026 National Working Meeting in Jakarta, Tuesday (23/6/2026).
Meanwhile, the second company, with the initials PT S, has around 4,000 employees. Of that total workforce, approximately 3,000 people are reportedly included in the projected job cuts should the production relocation to Vietnam be realised.
“For PT S, the number of employees is 4,000. It’s even worse, 3,000 are being talked about for layoffs. But it could be in the thousands,” he said.
If current projections are accurate, the total number of workers potentially affected could reach around 7,000 out of the 11,000 employed by the two companies.
Nevertheless, Said stressed that the relocation is still a plan and not yet a firm decision. The process of moving production facilities across countries is not something that can be done quickly. He estimates the companies would still need one to two years before actually executing the plan.
“It is quite large, but if we can convince the principals in Japan, the move to Vietnam might not happen. Because this hasn’t happened yet. Relocation is not that easy. They say it’s likely one to two years away. That means we still have time to negotiate,” Said explained.