The internationalisation of the automobile industry and the roles of foreign subsidiaries

Abstract

This study analyses the change in the roles of Brazilian subsidiaries of automotive multinational corporations, specifically those that have developed products in Brazil. The main goal is to offer a causality hypothesis for the reasons why subsidiaries of the same sector in the same country have different roles in their corporations after developing engineering capabilities for innovation. The analytical framework involves a discussion of subsidiary development and the degree of internationalisation of each company. The study was carried out between 2007 and 2009 at five Brazilian subsidiaries: Renault, General Motors, Volkswagen, Fiat, and Ford. The results suggest that these subsidiaries occupy a continuum of corporate roles that vary from global centre of excellence (CoE) to local implementer, with intermediate categories. The construction of an explanatory hypothesis results in a ten-step model for the internationalisation process of the auto industry. © 2012 Inderscience Enterprises Ltd.