The national automotive component manufacturing sector is currently in a difficult position due to pressure from various external factors. Secretary General of the Indonesian Automotive Parts and Components Industries Association (GIAMM), Rachmad Basuki, stated that global geopolitical turmoil and rising world crude oil prices have triggered shortages and surges in industrial raw material prices, such as plastics, oils, and lubricants.
This condition is exacerbated by the weakening of the Rupiah exchange rate against foreign currencies, which has made raw material import costs significantly higher. On the other hand, automotive manufacturers have no room to pass on production costs to the final selling price for consumers, given that public purchasing power is under pressure.
This dilemma results in a significant shrinking of profit margins for business players in the component industry. Rachmad explained that the inability to adjust selling prices makes business efficiency the primary focus for the industry to survive amid an unfavorable economic climate.
Amid these operational challenges, the domestic automotive industry also faces the threat of plant relocation to other countries. Supply chain stability and local manufacturing competitiveness are now major concerns to ensure the sustainability of the national automotive ecosystem amid uncertain global market dynamics.
