Until a few years ago, innovation in the automotive industry was centralised in the US, Europe and Japan. Manufacturing had moved to the industrialised emerging countries, but not innovation. This has now changed and the spread of Brazilian innovation activities in the automotive global value chain attests this shift. Yet, little is known on how and to what extent these new spaces of innovation have been developing and are affecting the division of labour between North and South. This book addresses this question drawing on an in-depth and extensive study of the building up of technological capabilities in Brazilian automotive industry in connection with multinational assemblers and suppliers off-shoring and outsourcing innovation activities from suppliers located in Brazil. Seeking to understand the dynamics of this process, the book analyses the new role of Brazilian subsidiaries of multinational assemblers and auto parts suppliers as well as of locally owned suppliers and research institutions. The book is useful to professionals in the fields of Economics and Management, particularly those interested in business innovation strategies and industrial and technology policy.