Modularity ten years after: an evaluation of the Brazilian experience

In November 1995 Volkswagen (VW) do Brasil announced a plan to build a new truck plant with a new form of organisation, the so-called modular consortium. Since then, many auto plants around the world have introduced some ideas on modular assembly and design. An evaluation of this period is our main objective in this article. First, we assert that the concept of modularity in the automotive business goes beyond design, product and use. Modularity implies to share investments and risks, and can be analysed as a service relation. We propose a consideration of Zarifian's (2001) specific definition of service as the transformation in the conditions of activity of an addressee or of their action facilities, a transformation whose consequences are judged valid and positive by the addressee or by the collectivity. At the end, we discuss the limits of modularity in the business, and utilising econometric analysis performed by Camargo (2006), we conclude that the suppliers at the first level have increased their market power of market and profit sharing.