Globalization and supply chain networks: the auto industry in Brazil and India

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Abstract

The automotive industries of emerging markets were transformed in the 1990s by trade liberalization and large investments by global assemblers. The impact of these investments was decisively influenced by government policies aimed at promoting local production and assembly of vehicles and by changing assembler—supplier relationships in the global auto industry. The cases of Brazil and India show how the assemblers created new linkages between operations in emerging markets and their global operations through the adoption of follow design and follow sourcing policies. These policies were hard to implement in practice, but they decisively transformed the components industries in both countries.

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