Managua, Nicaragua; November 21, 2017
Nicaragua’s light manufacturing industry has been key in the country’s economic growth, representing a 13.1 percent in Nicaragua’s total exports in 2016. This growth has been driven, to a certain extent, by the country’s competitiveness in terms of low operational costs, access to key markets around the globe, generous fiscal incentives under the free zone system, and the country’s successful Model of Dialogue and Consensus, established by the Government of Nicaragua along with the private sector and free trade zones workers.
Especifically, Nicaragua’s automotive harnesses manufacturing industry -which has been pivotal for the growth of the free zones industry- experienced a growth rate of 50 percent during the 2012-2016 period. According to the report on Foreign Trade issued by the Central Bank of Nicaragua, from January through September 2017, the harness manufacturing industry exported US$444.3 million, which represents a 25 percent of the free zones total exports.
Currently, there are four auto parts manufacturing companies operating under the free zone system, which altogether have created 15 thousand direct jobs and 45 thousand indirect jobs. World leaders, Yazaki and Dräxlmaier, manufacture for international brands such as Chrysler, General Motors, BMW, and Volskwagen. Addtionally, Cega and Plastimaq, both from Mexico, mainly provide components for assembling and testing automotive harnesses.
Although Nicaragua’s auto parts manufacturing industry has mostly been driven by the production of harnesses, the country still has the capacity of producing a wide variety of automotive components, including floor mats and liners, seat covers, deflectors and products that require labor intensive processes, apart from the country’s highly exported auto wire harnesses.
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En español: Manufactura fortalecida en Nicaragua