The planned relocation of two Japanese automotive component suppliers from Indonesia to Vietnam has emerged as a significant signal of the intensifying competition for electric vehicle supply chain investment in Southeast Asia[reference:65]. This development highlights the shifting dynamics of ASEAN’s automotive industry as countries compete to attract investment in the rapidly growing EV sector. This article examines the factors driving this relocation and the implications for Indonesia, Vietnam, and the broader ASEAN EV supply chain landscape.
The relocation of Japanese automotive component suppliers to Vietnam is seen as a warning signal for Indonesia’s automotive industry amid tightening competition for EV supply chain development in Southeast Asia[reference:66]. Automotive observer Yannes Pasaribu noted that Vietnam is increasingly aggressive in attracting EV component industry investment, particularly for new capacity development and factory expansion[reference:67]. While Indonesia still maintains a position as an established automotive production base, Vietnam is seen as offering stronger appeal for global investors in the race for new investment[reference:68].
Vietnam is perceived as offering a more supportive ecosystem for EV supply chain development, while Indonesia still faces policy uncertainty and a lack of competitive incentives for component manufacturers[reference:69]. The factors driving investment relocation are not determined solely by production costs or fiscal incentives, but also by regulatory certainty and consistency of government policy[reference:70]. Vietnam is seen as better able to present a stable and predictable business climate for investors, with more consistent policies that rarely change suddenly and a government that is more proactive in building a comprehensive EV component ecosystem[reference:71].
Additionally, relatively fast licensing processes and simpler bureaucracy further strengthen Vietnam’s appeal as a long-term investment destination[reference:72]. However, the relocation of the two Japanese suppliers is not yet seen as a massive wave of investment转移[reference:73]. Nevertheless, the event should remain a concern for the government as it has the potential to develop further if not responded to promptly[reference:74]. This case is significant as an early warning signal that, if not addressed seriously, could potentially develop and spread, especially among component suppliers planning to invest or expand their investments in Indonesia[reference:75].
The competition between Indonesia and Vietnam is increasingly focusing on capturing EV supply chain investment. Indonesia, with its world-leading nickel reserves, has become the most strategically valuable power battery industry center in ASEAN[reference:76]. However, Vietnam’s advantages in policy consistency, regulatory stability, and ecosystem development are proving attractive to investors. The Thai parliament’s recent approval of upgraded trade agreements including ATIGA and ACFTA on June 19, 2026, further shapes the regional trade landscape[reference:77].
In conclusion, the relocation of Japanese automotive component suppliers from Indonesia to Vietnam signals the intensifying competition for EV supply chain investment in ASEAN. Vietnam’s advantages in policy consistency, regulatory stability, and proactive ecosystem development are attracting investment, while Indonesia must address policy uncertainty and incentive gaps to maintain its competitive position. As the EV transition accelerates across the region, the competition for supply chain investment will only intensify.
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