The Case of Magneti Marelli Brasil: Endogenous and Exogenous Factors in Local Dominant Technology Development

Countries and automotive companies are searching for ways to reduce vehicle dependence on oil and its environmental impacts. Hybrid engines, as well as hydrogen, natural gas, alcohol, and other fuels, have been proposed and tested as options to the currently dominant gasoline paradigm. Through a case study, this paper presents the endogenous and exogenous factors that allowed Magneti Marelli Sistemas Automotivos (Brasil) to develop a flexfuel technology architecture, launched commercially in 2003, with which customers can choose gasoline, alcohol, or any mix thereof. This software-based technological architecture is now the dominant flexfuel design in the Brazilian auto market. The main contribution of this article is thus to document the emergence of a local dominant design in a specific car sub-system. The paper describes how a local dominant technological design emerges through the sharing of capabilities and interaction among the key market players (suppliers of flexfuel technology, automakers, and alcohol producers) and the Brazilian government's Pro-Alcool program. Another contribution is the tentative idea of a local dominant design/technology.