The technological strategy of Brazilian automakers for flex fuel vehicles: An exploratory study

Brazil began its experience on biofuel-run cars in the 1970s, when a government program - Pró-Alcool, meaning Alcohol Program - stimulated automakers with an industrial presence in the country to develop and manufacture cars to run on hydrated ethanol (5% water content) or a gasoline/anhydrous ethanol mix varying from 10% up to 25% (E10 to E25). Since the first model was launched by Volkswagen in 2003, flexible fuel cars - those that run on any proportion of ethanol and gasoline, from E0 up to E100 - already account for a third of the country's light vehicle fleet. In 2009, they accounted for over 90% of newly produced light vehicles, making the flex-fuel fleet a fast-growing one. Brazilian automakers have clearly made differing choices concerning their technological strategy. To see this, it is enough to consider first launch, engine compression rates, fuel consumption, and emissions. We propose that, in order to explain these differences, one must consider the affiliates' relative importance to their multinational group, their early involvement in development of ethanol-fueled vehicles, and their differing emphasis on local R&D, as well as their headquarters' differing global R&D choices.