Volkswagen in Brazil Aaron Brick Manual PDF

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Fuscões e Golaços: Volkswagen in Brazil Aaron Brick
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Portugal), and lasted several decades, long enough for Volkswagen to .... Proposed Stages of Localization of Manufacture of Volkswagen do Brasil, 19579 ...

1.

Industrialization

As a young man returning from France in 1891, Alberto Santos Dumont brought home Brazil’s first

automobile, a Peugeot1. It took almost another two decades before the local auto industry’s modest

start by Ford and General Motors. Their subsidiary firms were incorporated in 1919 and 1925,

respectively, to assemble CKD (completely knocked down) cars from kit. This industrial base was

installed in Ipiranga (suggestively, the site at which Dom Pedro I declared independence from

Portugal), and lasted several decades, long enough for Volkswagen to eventually place their own CKD

assembly facility nearby. Some body parts were locally fabricated or rewelded because the imports

were not sturdy enough to withstand Brazil’s relatively poor roads.

Getúlio Vargas and his successor Juscelino Kubitschek were the executives most responsible for

encouraging the development of a national auto industry. Vargas in the 1930s offered tariff rebates on

CKD imports, but it is not clear that these inducements were effective in nurturing the industry. He

also attempted to purchase the Czech carmaker Škoda during World War II2 (it was eventually bought

by Volkswagen in 1991).

Midcentury, ECLAC Chairman Raúl Prebisch concluded with Hans Singer that a static level of raw

material export is likely to purchase fewer manufactured imports over time3. This thinking motivated

the development of dependency theory, which united pessimistic liberal academics and populists

desiring self-sufficiency. What these parties missed was Harry Johnson’s caveat that protectionist

import substituting industrialization (ISI) is “likely to induce... foreign firms to set up local production

facilities to satisfy the demand previously satisfied by exports from their home country, rather than to

create a domestically owned and operated industry capable of competing successfully with its foreign

rivals.4” Laplane and Sarti’s recent call for “competitive import substitution5” bears comparison. As

several East Asian countries have shown, ISI does not necessarily lead to uncompetitiveness.

However, that was indeed the trap into which Brazil fell.

Historically depending on manufactured imports from the developed world, Brazil has historically

been short of foreign exchange. Its small reserves were so sensitive as to be proactively allocated by

Auto industry drives the Brazilian economy
Nascimento
Prebisch
Johnson
Laplane and Sarti [2003], pp. 10

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