The Brazilian Defense Industry: the armored combat vehicles sector and Engesa

Abstract

This paper analyzes the small and medium armored combat vehicle industry, in order to understand its modus operandi. We investigate the former largest Brazilian producer of small and medium armored combat vehicles, Engesa, and concluded that its world success was a result both of its privileged perception to occupy a market niche and of the special relationship among its CEO and the Brazilian Army. A combination of negative factors conduced the firm to its bankruptcy, in the beginning of the 1990s, but we also identified a huge business potential, which could be either occupied by Engesa, if it had not disappeared, or by a follower in this market. Key words: Industrial Economics, Industrial Policy, Armaments Industry Classificação JEL: L22; L25; L52; L64; O24 Artigo recebido em mar. 2009 e aceito para publicação em jan. 2010.