INTERFIRM PARTNERSHIPS AND ORGANIZATIONAL INNOVATION FOR INDONESIAN AUTOMOTIVE COMPONENT MANUFACTURERS FACING THE TRANSITION TO BATTERY ELECTRIC VEHICLES

Background: Indonesia’s Automotive Industry has gradually shifted from manufacturing Internal Combustion Engines (ICE) to Battery Electric Vehicles (BEV) in recent years. This transition of Battery Electric Vehicles (BEVs) is disrupting conventional automobile manufacturers, creating an urgent need for traditional automakers and component suppliers to innovate and revamp of the current automotive manufacturing capabilities. However, The pursuit of Interfirm partnerships between OEMs and suppliers is believed to enhance resiliency and innovative process within the automotive organization. The main objective of this study is to identify the impact of several factors interfirm partnerships affecting the implementation of organizational innovation activities.   Methods: A quantitative cross-sectional design was adopted for this study. The data collection consisted of 30 respondents from 1st tier of Indonesian Automotive Component Manufacturers through site visits, interview and online questionnaires. Data processing and analysis were carried out using descriptive statistics, factor analysis and multiple linear regression.   Results: The result indicate that interfirm partnerships factors associated with organizational innovation activities. Among four key aspects of interfirm partnerships such as Efficiency, Innovation and Learning, Market opportunities, and Technology and Competition, only the motives aligned with the latter were found to exert a statistically significant and positive impact on organizational innovation.   Conclusion: The study reveals that technology and competition in the context of interfirm partnerships formation shows positive and significant relationships with organizational innovation.   Implications of research: The research helps the Indonesia Automotive Industry to improve manufacturing capabilities and competitiveness in electric vehicles sector and also expands the literature on Battery Electric Vehicles research for academics.   Originality and value: The study performs the assesment of relationship between interfirm partnership and automotive component organizations in Indonesia. By addressing practitioners’ viewpoints, this research utilizes quantitative measurement to drive automative innovation and enhance manufacturing capabilities with the presence of Battery Electric Vehicles.