A new player in automotive public policies: the role of tooling industry on Inovar-Auto

In 2017 the incentive program for the Brazilian automotive industry, called Inovar-Auto, was interrupted. Inovar-Auto began under the government of the Workers' Party (PT), with the executive presidency Dilma Rousseff (elected in 2012), with the objective, defined by the Law 12.715 of 2012, to promote technological development in the automotive sector. To qualify, automotive companies (carmakers) should meet a general condition, in addition to specific conditions. The general condition is that vehicles (products) meet certain efficiency goals when it comes to fuel consumption and pollutants emission by October 2017.

As long as this general condition is satisfied, four more specific conditions in terms of the presence of national content and percentage of local investments should be met. The companies qualified in such conditions would then be benefited with presumed industrialization tax credit, based on expenditures on suppliers and national technological development.

The expenditures described by the legislation and considered as necessary activities to be carried out by the companies to obtain the credits granted in Inovar-Auto are: research; technological development; technologic innovation; strategic supplies; tooling; contributions to the National Development and Technological Fund (FNDT); supplier training; engineering and basic industrial technology. Due to the contemporaneity of the program, the scientific discussions about its results are still in force, centered on the development of the national automotive chain and in the achievement of its main aim: the technological development.

Nevertheless, little attention was devoted to an innovative peculiarity among the public policies to the automotive sector: the role of tooling sector. In order for the companies qualified in the program to receive the tax benefits, they should allocate their expenditures to national suppliers, and one of the natures described is the expenditures in tooling.

Therefore, this his paper aims to discuss the role of the tooling industry as a new agent for public policies in the automotive sector.

 

This research began as an exploratory research, carried out along with members of the Brazilian Association of the Tooling Industry (ABINFER), in order to obtain information regarding the elaboration, goals, implementation and evaluation of Inovar-Auto. Those interviewed, who participated actively in the design of this program, highlighted several points that they considered important in the development of Inovar-Auto. Based on their reports, we undertook searches for documents and publications, aiming to deepen an element that we consider essential and still little discussed in the conception of Inovar-Auto: the role of the tool industries in Brazil, in a government incentive program designed for a durable consumer goods industry with a predominantly international profile (such as the automotive industry).

Thus, the objective of the present work is, first of all, to analyze the Inovar-Auto as a whole, compared to other public incentive programs recently applied in Brazil; and subsequently to specifically discuss the importance assigned to the tooling industry at Inovar-Auto.

 

The research points out that the inclusion of the tooling sector in an industrial incentive program specifically aimed at the automotive sector (Inovar-Auto), resulted in significant impacts on the development of a sector in which base there are important companies of national capital, aside from being labor intensive and demanding for local engineering challenges.

It became evident though, that this is a heterogeneous sector, in such way that more precise inferences about its development as a result of its inclusion as part of an incentive policy for a broader industrial sector (as is the automotive sector), requires empirical surveys still not carried out (as we could see from the survey, in the most recent publications on Inovar-Auto).

As part of the results, it was identified a gap though, which might be filled with further works, considering the need of the elaboration of measurement mechanisms, by the State, to evaluate the impacts of the tooling sector in the automotive industry, in programs such as Route 2030 (which will be presented by the federal government in 2018 as a substitute for Inovar-Auto).