Innovation capabilities in the Brazilian automobile industry: a study of vehicle assemblers' technological strategies and policy recommendations

Abstract

This paper is concerned with the development of technological capabilities in the Brazilian subsidiaries of multinational assemblers in Brazil, particularly their involvement in Product Development (PD). The paper addresses the following issues: What roles have vehicle assembly subsidiaries played in building up local technological capabilities in PD in Brazil? How complex are such activities? Are innovative technological capabilities being accumulated as result of the involvement of subsidiaries with PD? Complementary, the paper addresses the question of what are the implications of assembler's PD location strategy for local auto-parts producers. The paper concludes with policy implications and discussion on the benefits of decentralisation.