International fragmentation of production of the Brazilian automotive industry

The aim of this present work is to analyze the insertion of the Brazilian automotive industry into the process of international fragmentation of the production. The forms of the insertion of the Brazilian automotive industry may provide a light on the manners on which the development of subsidiaries of multinational companies may play a role on their integration on the international trade of both final and intermediate goods. Analyzing the accumulated development capacities of emblematic automakers in Brazil, it became clear that there is a strong knowledge in developing some specific parts of motor vehicles, a growing delegation of the development of larger and larger fractions of the full vehicles to the local subsidiaries, and even the local presence of the headquarters of the trucks and buses operations of Volkswagen. Moreover, some organizational practices were studied, which postulate the international sharing of as similar as possible components among the vehicles produced worldwide and the proximity of the operations of first-tiers suppliers to the final assembly. Finally, the analysis of quatitative data provided foundation to affirm that Brazil is an important exporter of vehicles, mostly to other developing economies, specially in the segments of trucks and buses, and that the accumulated competences in some specific components of the vehicles did indeed assure the country benefits on the international trade referent to them, especially when compared to other goods that are not mentioned in the developed capacities of the local automotive industry.