ANALYSIS OF INDONESIA’S ECONOMIC DEPENDENCE ON JAPAN IN THE AUTOMOTIVE SECTOR: A CASE STUDY OF IMPORTS OF CAR RAW MATERIALS AND ENGINE COMPONENTS FOR THE PERIOD 2021–2024
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Abstract
This study aims to analyse Indonesia’s economic dependence on Japan in the automotive sector, particularly regarding the import of automotive raw materials in the form of engine components during the 2021–2024 period. Japan’s dominant role as the main supplier of automotive components and one of Indonesia’s largest investors indicates an asymmetric economic relationship that may lead to structural dependence. This research employs a qualitative approach using a descriptive-analytical case study design. Data were collected through library research from Statistics Indonesia (BPS), the Ministry of Industry, the Association of Indonesian Automotive Industries (GAIKINDO), the Indonesia–Japan Economic Partnership Agreement (IJEPA), and other relevant academic literature. Data were analysed through data reduction, data presentation, and the drawing of conclusions based on Dependency Theory. The findings reveal that Indonesia continues to experience a high level of structural dependence on Japan in the automotive sector. This dependence is driven by the dominance of Japanese automotive investment, limited domestic technological capability and industrial capacity, and the consistently high import ratio of engine components, which exceeds 40 per cent. Furthermore, the implementation of the IJEPA and the Domestic Component Level (TKDN) policy has not significantly reduced dependence on core automotive components, as technology transfer has not been effectively realised. The study concludes that Indonesia remains trapped in an ‘assembly trap’, where high levels of vehicle assembly continue to rely heavily on imported engine components from Japan. Therefore, strengthening technology transfer, increasing investment in research and development (R&D), and diversifying strategic partners are essential to achieving a more independent national automotive industry.
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