The evolution of flex-fuel technology in Brazil: The Bosch case

Flex fuel vehicles can be powered by any mix whatsoever of gasoline and ethanol. Special software for fuel identification and motor control is its main feature. Beginning in 2003, today already 23% of the Brazilian fleet and 95% of new cars have been built using this technology. Bosch was the pioneer in an early version in USA, in which it has been investing since the 80s. Bosch also made the earliest prototypes in Brazil (a GM car in 1994). But then Magnetti Marelli championed the architecture that is ultimately successful in the Brazilian Market: the so called software sensor technology. Bosch seems to have been reluctant in adopting the software sensor technology. Fixation in an early architecture, larger global and American market share and relatively smaller subsidiary in Brazil than Magneti Marelli are factors that seems relevant to explain this lagging behavior. This case research shows the importance of absorptive capacity and other competition factors on determining a dominant design for flex-fuel injection systems.