Public policies and sectorial targets The effects of the new industrial policy on the Brazilian automobile sector

ABSTRACT This article examines the new conditions created by the Brazilian Automotive Regime since the second semester of 1995. First, it discusses the main controversies surrounding the implementation of a new modality of industrial policy on the part of the federal government and the incentives granted by the state governments to the companies of the automobile sector in Brazil. Second, this article sketches a picture of the situation of this industrial sector, with emphasis on the changes that are happening in the relationships between assembling industry and auto parts industry. ln the context of the new climate of competition created by the tendencies towards globalization of markets and by the new guidelines of the industrial politics in place, this article shows that new modes of governance in the relations between the local “montadoras” and their providers are replacing the old competitive strategies.