The Automobile Industry in Mercosur

Since its start, MercoNet has made an important contribution to the study of foreign direct investment (FDI) with this research being picked up by numerous publications.
Most recently, it developed research on the automotive industry due to its importance in the composition of FDI flowing into the region, as well as its impacts on the respective economies regarding employment, technological development, balance of trade and for the priority which has always been given this industry in terms of government public policy and the controversial place this industry has occupied in Mercosur negotiations.
At the same time, one of the objectives sought after since the start of the integration process began has been the definition of common industrial policies with the aim of strengthening the degree of productive complementation and improving the region?s position in the global value chain. One of the relevant aspects to achieving these goals is understanding how national strategies and eventually regional strategies can be made compatible with those of transnational corporations operating in certain industries, such as the automotive industry. This book presents a synthesis of the research results that were made possible through the support of the IDRC.
After defining the research objectives ? evaluate the impacts of the industry in each country, revise the business strategies and reach of productive complementation between the Mercosur countries ? global industry trends were analyzed as a framework for the national studies.
These global trends are addressed by the possibility of developing national and regional policies and strategies, and with the developments and current state of the industry. Finally, policy recommendations are presented for the auto parts industry such as supporting design and innovation activities, designing a common auto parts policy and the need to adopt policies to promote exports. In particular, the study points out the limitations to innovating in policies regarding the strategies of multinational companies and the industry?s own trends (commonalization, modularization, and global sourcing) and the difficulties the sector faces in reaching agreements between Mercosur countries, due to the weight of the both the opposing strategies and the national objectives.
At present, when strategies and definitions are being formed, the contribution of these studies is especially significant for the sector?s knowledge and impacts. This is especially true when some of the most relevant Mercosur themes are discussed, such as public policy, tariff revision and productive complementation.