Workforce You Can Count On
The automotive industry in Central America benefits through its access to a low-cost, trainable workforce.
Automotive Industry Overview
The Central American Story
The automotive industry in Central America is mainly comprised of the manufacture of wire harnesses for passenger vehicles. The access to a low-cost and trainable workforce throughout the region has been the one of the main reasons why the automotive industry in Central America has grown over the past several years.
Most of the production of wire harnesses for the automotive industry in Central America is takes place in the neighboring countries of Honduras and Nicaragua. Among the automotive industry OEMs that Honduran-based manufacturers supply include Ford, General Motors, Chrysler, Kia, Hyundai, Subaru, BMW and Audi. At the close of 2017, exports of automotive electrical equipment (mainly wire harnesses) shipped from Honduras to its customers totaled US $660 million dollars. This represented a 3.5% increase over numbers posted at the beginning of the year.
Nicaragua is also a center for the automotive industry in Central America. Between the years 2012 and 2016 the production of wire harnesses in Nicaragua grew by an average of 50%. This was due to the expansion of companies that operate in the country such as Japan’s Yazaki and Germany-based Draexlmaier. Additionally, the French automotive manufacturer, Delfingen, opened a new plant for the production of wire harnesses in the first quarter of 2017.
In addition to wire harness among the items that can be produced in the automotive industry in Central America are involved in the production of exhaust systems for companies such as BMW, Volkswagen and Harley Davidson.
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Automotive Industry Outlook
The United States is the main destination for harnesses and electrical parts for automobiles that are manufactured in the Central American automotive industry. The president of the National Association of Industrialists in Honduras, Martin Chicas, predicts that, due to the country’s free trade agreements, Honduran exports of wire harnesses will triple in 2018.
The automotive industry in Honduras is made up of a small number of large companies. These firms are dedicated to the production of wire harnesses and are transitioning into the production of additional types of wiring and printed circuit boards.
Although traditional commodities continue to lead the list of Nicaraguan exports, the country’s fasted growth is now found in nontraditional manufactured goods such as auto parts and apparel.
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