New Brazilian automotive policy and the increase of auto parts local content: a critical analysis of the automotive supply chain

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Abstract:

The aim of this study is to identify in the new framework of Brazilian automotive policy, called “Inovar-Auto”, the participation and strategies of auto parts suppliers together with automakers to obtain government benefits like income tax reductions, by increasing the local content trades. However, one of the major challenges to achieve this goal is to set more specific rules by the Government of how to calculate the increase of local content trades and also how to ensure the supply of local inputs. One of the tools from the study is an analysis of the traceability of the origin and operation of raw materials to the final product. This analysis was based on interviews conducted on suppliers of auto parts in the automotive district located in the southern region of the State of Rio de Janeiro, Brazil.