Globalisation and Assembler-Supplier Relations: Brazil and India

Abstract

Over the past decade, a substantial amount of FDI has been channelled into the motor industries of the emerging markets. New investments in the emerging markets have become strategic not only for the assemblers but also for first-tier suppliers, and the subsidiaries of transnational companies in these markets have become more closely integrated into the global operations of their parent companies. Consequently, the motor industries of these countries have been structurally transformed. In some respects, the emerging markets have been places for innovation and experimentation within the motor industry. Their weaker social institutions and regulation, combined with their convenient distance from global headquarters, have allowed experiments in assembler—supplier relations. In many respects, the assemblers are using the opportunities afforded by greenfield investments and weak trade unions to introduce more advanced systems in developing countries such as Brazil, China and Thailand than might be seen in Europe or North America.¹