Globalisation and Supply Chain Networks: the Auto Industry in Brazil and India

In the past decade, the auto industries of developing countries have been transformed by trade and investment liberalisation policies and the global expansion of the auto industry. The protective instruments (tariffs, quantitative restrictions, investment controls, etc.) that once shielded most developing countries auto industries from international competition have been partially dismantled. However, governments have remained active promoters of the auto industry through investment incentives, local content regulations and tariffs. Government promotion of the auto industry has interacted with the globalisation strategies of the major auto assemblers. These firms have looked to the larger emerging markets (ASEAN China, Eastern Europe, India, Mercosur and Mexico) for both low-cost production sites (particularly for low-end cars) and for growing markets to offset stagnation in the industrially advanced countries. In the past decade, these regions have attracted considerable foreign direct investment (FDI) and the prospects for the auto industry have been transformed.