Title: Nicaraguan Automotive Sector Shows Strong Performance in 2023 Amid Union Closure
Subtitle: Imports of Transportation Equipment Surge, Reflecting Growth in Sector
The automotive sector in Nicaragua has started the year 2023 with its best performance in the last five years, despite the closure of its union organization. This surge in performance is reflected in the significant increase in imports of transportation equipment. According to official figures, the amount invested in these purchases in the first four months of 2023 is 15 percent higher than the amount invested in the same period in 2018, before the outbreak of the sociopolitical crisis that the country is currently experiencing.
The official report on imports of transportation equipment does not provide details on the number of units purchased, making it difficult to determine if the increase in imports represents a greater number of units or if it is solely due to the overall rise in prices affecting all sectors of the economy.
Representatives of the sector have set a sales goal of 18,000 vehicles for 2023, which is within the sales range of 2017 when the industry aimed to place 18,500 units. This indicates that the sector has not yet fully recovered sales levels from before the 2018 crisis.
The import report published by the Central Bank of Nicaragua (BCN) reveals that between January and April 2023, the country allocated $181.11 million to imports of transportation equipment. This figure is the highest since 2018 when $156.93 million was allocated for the same purpose. The sociopolitical crisis and the subsequent COVID-19 pandemic had a significant negative impact on these imports.
In 2019, Nicaragua allocated only $70.35 million to transportation equipment imports, marking the lowest amount in the past five years. However, in 2021, the sector began to show signs of recovery with import purchases totaling $137.37 million. Between January and April 2023, imports reached a record high of $181.11 million.
Dump trucks, minibuses, and vans accounted for the largest portion of transportation equipment imports, totaling $69.52 million. Quadricycles and sedans, which are popular vehicles in the country, accounted for $45.47 million of the imports. Motorcycles, the most commonly used vehicles in Nicaragua, required $22.64 million, while imports of bus seats and mounts amounted to $3.17 million. The remaining $36 million was invested in the importation of batteries and spare parts for vehicles.
Despite the closure of the Nicaraguan Association of Automotive Vehicle Distributors (Andiva) in January, the industry remains optimistic about its growth prospects. The closure of Andiva, which had been operational since 1968, will not affect the continuation of group events organized by the distributors. Two collective fairs have been scheduled for 2023, along with individual events, to achieve the sales target of 18,000 units. However, even if this goal is met, it would still fall short of the sales figures prior to the crisis outbreak.
While banks continue to promote pre-approved loans for vehicle purchases, financing through this channel remains lower than pre-2018 levels. Many customers in the sector have opted for consumer loans and credit cards, which offer faster disbursements, to finance their vehicle purchases.
Despite ongoing challenges, the Nicaraguan automotive sector is experiencing a notable recovery in 2023, with increased imports and positive sales projections. The sector remains hopeful for continued growth throughout the year while navigating the sociopolitical crisis and adapting to changing consumer financing preferences.