Without a Brazilian industrial policy, the national automotive engineering sector is on alert

The rise in imports weakens the national automotive engineering sector and exposes flaws in Brazilian industrial policy and local content regulations.

The Brazilian Automotive Engineering Association (AEA) warned that the national automotive engineering sector is facing a silent weakening process in the face of the advancement of production models based on imports.

The diagnosis was presented by the organization’s president, Marcus Vinicius Aguiar, this Tuesday, December 16, 2025, during the launch of the Strategic Engineering Forum, in São Paulo.

According to the AEA, the absence of a structured Brazilian industrial policy has reduced the country’s role as a hub for engineering, research, and development, even in a global scenario that demands solutions in decarbonization, local content, and technological development. 

The current production model puts pressure on the national automotive engineering industry. 

The AEA’s warning comes at a time of accelerated change in the automotive industry, marked by the expansion of imports in different production formats.

Vehicles arrive in the country fully assembled, partially assembled, or disassembled in kits, with low local content requirements. 

According to the organization, this model limits technology transfer and reduces the need for engineering centers in Brazil.

As a consequence, the national automotive engineering sector is losing ground, even with highly qualified professionals. 

“We are standing idly by while the national engineering sector weakens,” stated Marcus Vinicius Aguiar. 

Local content and technological development at risk 

According to AEA, the problem lies not in opening the market, but in the lack of structural countermeasures.

The absence of clear requirements for local content and technological development prevents demand from translating into industrial learning and value creation. 

Aguiar points out that Brazil possesses significant technological expertise, especially in areas that are strategic for the global automotive industry.

These include biofuels, electrification, and bioelectrification, technologies aligned with the Brazilian energy reality. 

“This most recent scenario worries us because, in recent years, we have been watching, with our arms crossed, a certain weakening of national engineering, when — in reality — our professionals possess technological expertise,” argues the president of AEA. 

Paradox of the Brazilian automotive industry 

The diagnosis presented by the organization exposes a paradox..

The country has qualified engineers and recognized technical expertise, but it is unable to convert this asset into a sustainable competitive advantage within the automotive industry. 

Without a consistent Brazilian industrial policy, human capital ends up underutilized. This compromises the creation of skilled jobs and limits the country’s ability to lead technological solutions in sustainable mobility. 

Meanwhile, other markets are transforming the energy transition into a long-term industrial strategy. 

The experience of the São Paulo subway system reinforces the importance of industrial policy. 

The AEA’s analysis finds support in the assessment of Claudio de Senna Frederico, vice-president of the National Association of Public Transport (ANTP).

In an interview with Diário do Transporte, Frederico recalled that the implementation of the São Paulo Metro in the 1970s was associated with an explicit guideline of protecting national industry and transferring technology. 

This strategy allowed for the emergence and consolidation of Brazilian manufacturers, creating a solid industrial base. Over time, however, this strategic vision was abandoned. 

Public procurement as a development tool 

Second FredericoCountries such as Canada, the United States, and members of the European Union use public procurement as active instruments of industrial policy.

Brazil, on the other hand, maintains a stance that no longer finds support on the international stage. 

He cites the recent case of Toronto, which canceled an international tender to ensure a minimum percentage of local content in the acquisition of trains. For Frederico, this is a matter of economic pragmatism, not ideology. 

“The world has changed. We live in an era of aggressive barriers and widespread protectionist practices,” he stated. 

Strategic Engineering Forum targets state policies. 

With the Strategic Engineering Forum, AEA seeks precisely to contribute with technical input for the formulation of state industrial policies.

The initiative aims to bring together automakers, system integrators, government, academia, and financial institutions around a common agenda. 

The proposal aims to strengthen national automotive engineering, expand local content, and boost technological development, with direct impacts on public transportation and urban mobility. 

The organization plans to hold four editions of the forum per year starting in 2026. 

Strong engineering as a development strategy 

Thus, the convergence between the analyses of AEA and industry experts reinforces a central point: defending the national automotive industry is a strategic decision.

Without strong engineering, the country loses the capacity to decide, innovate, and transform public investments into lasting economic and social development. 

Therefore, in this context, Brazilian industrial policy ceases to be an option and becomes a necessity to guarantee competitiveness, technological sovereignty, and long-term value creation.