Current developments of the Brazilian automotive industry

In the context of the stabilization and economic growth that hasfollowed the Real plan introduced in mid 1994, the latest effort tocurb dramatically high inflation, the Brazilian automotive industryhas continued to grow following a series of policy changes occurredthroughout the 90s.The industry has "boomed" for two consecutive years, achievingrecord production and sales levels. In 1994 production volumereached 1.5 million units, domestic sales of 1.3 million and 380.000units exported. And a record volume of 150.000 units of importedvehicles penetrated the Brazilian market. After more than a decadeof stagnation and with a poor technological and efficiencyperformance, this partial success crowns a restructuring process thathas implemented lean manufacturing principles as the new industryparadigm and a new set of industrial policies that has liberalized theBrazilian economy and has stimulated the cooperation among themajor stakeholders - government, companies, labor.This paper will focus on the most recent economic performance andpolicy changes in the Brazilian automotive industry, which faces theformidable challenge of being competitive internationally as newinvestments of US$ 10 billion expected until the year 2.000 to raisethe production volume of 2.5 to 3 million.