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Leading Sectors for U.S. Export and Investment

Commercial Sectors

Automotive: Accessories, Auto Parts and Service Equipment AUT

Overview

Unit: USD Millions

 

2011

2012 (1)

2013

(estimated)

2014

(estimated)

Total Market Size

422

395

406.3

418

Total Local Production

n/a

n/a

n/a

n/a

Total Exports

23

25

25.7

26.4

Total Imports

399

370

381.1

392.5

Imports from the U.S.

134

132

136.9

141

Exchange Rate: 1 USD

7.85

7.85

7.85

7.85

Data Sources: SIECA, Banco de Guatemala, Industry Sources

Note: Data was estimated because statistics are available for/until October 2012 (1)

Total Local Production: n/a

Total Exports: USD 25 Million

Total Imports: USD 370 Million

Imports from U.S.: USD 133 Million

Guatemala continues to be an important market for automotive parts and accessories. On average, Guatemalans keep their automobiles for 5-7 years before purchasing a newer model. There is a large market of importers who buy damaged cars at auctions in the U.S. These automobiles are repaired and refurbished locally for later re-sale. The vehicle park in Guatemala exceeds 2.3 Million units, including motorcycles. These vehicles require continuous maintenance and replacement services. Imported parts and equipment are sold to local mechanic shops, service stations and gas stations. The significant volume of used vehicles in circulation has stimulated the need for this type of equipment. Automotive parts importers must supply the demand from local importers of used cars, who need parts to repair sometimes severely damaged cars.

Thirty five percent of all automotive parts, accessories and service equipment are imported from the U.S. with the remaining percentage of imports coming from Asia (mostly Korea, Japan and China), Brazil and Europe. Asian manufacturers are present in the market with low priced products. It is estimated that almost seventy five percent of the cars circulating in Guatemala represent Asian brands.

Customs records for Guatemala report that the U.S. has approximately thirty five percent market share.

In 2012, Congress approved a law to double the Guatemalan vehicle road tax. In early 2013, there are reports that indicate that vehicle imports have dropped over 30% already due to the high impact that the law has on the economy of those who were interested in changing their vehicles for a newer model.

The new law also prohibits the import of vehicles older than 10 years.

Because of the decrease in vehicle imports, the current vehicle park will grow older in the market and need maintenance parts to continue working for more years before owners are ready to purchase newer models.

There is a great opportunity for U.S. exporters of automotive parts and accessories that will help maintain the current vehicle volume.

Sub-Sector Best Prospects

The most promising sub-sectors for U.S. products within the industry include aftermarket products such as: bumpers, spoilers, tail lights, wheels, sound systems, alarms, tires, batteries, suspension kits, mufflers, filters, chips, exhaust systems, brakes, windshield wipers, spark plugs, wheel covers, steering wheels, etc.

Other promising products are service equipment such as: lifts, tire repair, electronic diagnosis, tire balancing, compressors, and in general all necessary equipment and tools for service stations.

Opportunities

There are more than one hundred spare parts and service agents in Guatemala due to the large demand for aftermarket products, service tools and equipment. The majority of agents and distributors, whether they are large companies or small entrepreneurs, are always open to look at new alternatives to offer their customers. It is very important to note that this market is completely price driven and that Asian brands are well positioned in the market. Innovative, unusual products are a good opportunity for U.S. manufacturers as long as the prices remain competitive. For additional information, please contact Ana.Polanco@trade.gov

Market Size: 2,389,240 vehicles (2012)

U.S. Auto Parts Exports: USD 133 million in 2012

Impact of Tariff Reduction: Free duty entrance for automotive parts under CAFTA -DR, which had ranged from one to twenty percent, provides immediate cost savings.

Other Trade Agreement Impacts: Origin rules in CAFTA-DR allow remanufactured parts to qualify for duty free treatment, potentially expanding the market for these products in the CAFTA-DR region.

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Security and Safety Equipment SEC

Overview

Unit: USD thousands

 

2011

2012

2013 (estimated)

2014

(estimated)

Total Market Size

498,682

537,197

551.198

580,458

Total Local Production

n/a

n/a

n/a

n/a

Total Exports

20,163

12,269

15,384

17,884

Total Imports

518,845

549,466

566,582

598,342

Imports from the U.S.

303,445

289,870

296,567

305,468

Exchange Rate: 1 USD

8

8

8

8

(Statistics based on HS codes : 8424, 8471, 8521, 8525, 8528, 8530, 8531, 8536, 8541, 8523, 8543, 9022.)

Note: Data was estimated because statistics are available for/until October 2012 (1)

Total Market Size = (Total Local Production + Total Imports) – (Total Exports)

Data Sources:

Total Local Production: n/a

Total Exports: Sieca

Total Imports: Sieca

Imports from U.S.: Sieca

Guatemala has increasing insecurity due to the expansion of drug cartels, organized crime, gangs and lack of prosecution and conviction, and an ineffective and insufficient police force.

Robberies of all types are committed daily and the general perception is that four key institutions: the courts, Prosecutors office, the army and the police government agencies, as well as processes initiated by the International Commission Against Impunity in Guatemala and the selection of judges of different instances have been infiltrated by the cartels and organized crime. The general public has little or no confidence in law enforcement agencies believed to be corrupt.

Citizens also recognize the lack of the ability of the police to protect private property and companies. Companies as well as individuals are taking security into their own hands hiring private security and demanding more security systems. The country roughly has 28,000 active police officers and 100,000 to 120,000 private guards.

According to security statistics in Guatemala:

  • In 2012 Guatemala ranked 5th in Latin America with a rate of 39 murders for every 100,000 citizens, while in 2011 it ranked 4th with 42 murders/ 100,000 citizens
  • There are currently 182 companies in the security business
  • More than 454,000 registered guns and approximately 1.5 million illegal guns in the country

Sub-Sector Best Prospects

According to the Security Chamber of Guatemala, private companies invest between 10 to15 percent of their annual budget in security products and services.

The demand of security and safety products in Guatemala has grown each year as the security in the country gets worst and citizens and private companies demand and spend more in this industry.

U.S. products have the majority of market share with 47.24% and compete with Mexico, Asia and Germany. Most of the well-known brand companies from the U.S. have a distributor or agent locally and offer training, installation and after sales service.

Best prospects for products and services in the security and safety sector include:

Tracking devices

CCTV

GPS and RFID technology

Token

Metal detectors (manual and arc type)

Biometrics

Perimeter security

Alarms

Access control equipment

Armored vehicles

Opportunities

Personal security products, protection products and high tech solutions and services have the most significant opportunities. All security products are imported and there’s no local production. Import taxes for these products range from 0 to 15 percent plus the VAT of 12 percent.

CS Guatemala is in constant contact with security and safety equipment importers as well as the Security Chamber of Guatemala, to keep track of market trends, and importers interested in U.S. made products. CS promotes and sends a delegation of importers each year to the ISC Expo in Las Vegas, Nevada.

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Travel and Tourism TRA

Overview Return to top

The United States is one of the top three destinations for Guatemalan travelers along with the Central American neighboring countries and Mexico. At least half of the traveling community chooses to travel to destinations such as Dallas, Los Angeles, Miami, Orlando, New York and Chicago. These are in great demand due to the convenience of non-stop flights, the belief that they offer the best family entertainment experience, and/or because family and friends live in these locations. It is estimated that 1.4 million Guatemalans live in the United States.

Growing destinations for Guatemalan visitors are Boston, Massachusetts, Texas; Las Vegas, Nevada, Washington DC, San Francisco, California, and Atlanta, Georgia. Business people or attendees to trade events constitute an important category among travelers. Guatemalans distinguish themselves by taking advantage of the opportunities they have while traveling on business and will take time to conduct tourist activities.

Airlines serve the Guatemalan market with over 75 direct flights per week to the United States. The following airlines offer daily non-stop flights from Guatemala to the United States: American Airlines, Continental Airlines, Delta Airlines, Spirit and Avianca. Other airlines also service the Guatemalan market offering flights to the U.S. and multiple destinations, such as Copa Airlines, Iberia Aeroméxico and Lacsa.

Carriers offer flights to Atlanta, Chicago, Fort Lauderdale, Dallas, Houston, Los Angeles, Miami, Newark, New York, Orlando and Washington D.C. The duration of these flights ranges from two to four hours maximum, which makes it very attractive for Guatemalans to plan their vacations or business trips. From these major cities, airlines offer a significant number of connections to the rest of the United States and the world.

Sub-Sector Best Prospects

Sectors within the U.S. Travel and Tourism market that are considered best prospects are:

  • family attractions
  • family friendly hotels
  • shopping venues (outlets and discount stores)
  • entertainment shows
  • sports events
  • cruise trips

Many Guatemalans look forward to sending their children to enhance their English speaking skills through exchange programs. There is also a market for Colleges and Post graduate schools to offer their programs to Guatemalan students.

Opportunities

CS Guatemala is active in promoting U.S. Travel and Tourism destinations. CS actively supports the Visit USA Committee’s activities in the country, recruits delegations to attend important tourism trade events such as “Pow Wow” (http://www.ipw.com) ), and maintains active contacts with the local media in order to feed them information on U.S. destinations for later distribution, printing and/or advertising.

The Visit USA Committee in Guatemala organizes a targeted International Trade Show every year to promote the U.S. as a travel and tourism destination. Airlines, hotels, car rentals, insurance companies, cruise lines, U.S. Convention and Visitors Bureaus, and U.S. Tourism Offices are among the main exhibitors. Interested parties may contact Senior Commercial Specialist, Ana.Polanco@Trade.gov (ana.polanco@trade.gov) at the U.S. Commercial Service Office in Guatemala This event which will take place on August 22-23, 2013.

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Forestry and Woodworking Machinery FOR

Overview

Unit: USD thousands

 

2011

2012 (1)

2013

(estimated)

2014

(estimated)

Total Market Size

17,367

17,956

18,416

19,592

Total Local Production

n/a

n/a

n/a

n/a

Total Exports

901

749

832

865

Total Imports

18,268

18,705

19,248

20,457

Imports from the U.S.

6,593

5.886

6,617

6,812

Exchange Rate: 1 USD

8

8

8

8

(Statistics based on HS codes : 8202, 8203, 8461,8464, 8465)

Note: Data was estimated because statistics are available for/until October 2012 (1)

Total Market Size = (Total Local Production + Total Imports) – (Total Exports)

Data Sources:

Total Local Production: n/a

Total Exports: Sieca

Total Imports: Sieca

Imports from U.S.: Sieca

Guatemala exported USD 92.7 million of furniture and forestry products in 2012 a 15.29% increase from 2011 and will continue this trend as companies diversify and reaches other markets.

This Industry is very well organized in Guatemala and generates 90,000 jobs in the country. Much of this market is fueled by domestic and export demand. Manufacturers in Guatemala have realized the need to modernize their woodworking machinery and shift towards mechanized mass production to fill the demand gap in the country and meet international standards of price and quality. Technology up-grades and capacity expansion are a strong focus area for woodworking today in Guatemala

Guatemala has many different microclimates throughout the country creating a perfect environment for the development of wood forests for cedar, mahogany, pine, teak and many others. According to the Forest Guild of Guatemala there are around 22 wood mills and around 200 companies that use wood to manufacture products for construction, furniture and carpentry.

The Guatemalan Government created in 1997 the National Forest Institution (INAB) that is in charge of the promotion and execution of policies to maintain current forests and also offer incentives to large land owners to grow forests for production and conservation. These policies have been very effective since the creation of this entity, and as a result Guatemala has large areas of forest for production with many different types of wood.

The U.S. is the major exporter of wood-related equipment and accessories but has strong competition from China and Mexico that have gained market share in recent years. Most of the local importers do prefer quality products that do not wear down as fast as Chinese made products but still sometimes price can be an important issue. U.S. exporters have the advantage of exemption of import duties for wood equipment, tools and others due to CAFTA-DR.

Sub-Sector Best Prospects

Best prospects for forestry and woodworking sector include:

  • Arch machines
  • CNC Routers
  • Door Machines
  • Glue applicators
  • Chippers
  • Electric Saws
  • Sanders
  • Tools

This is the machinery and tools that show a large demand by furniture manufacturers carpenters and sawmills.

Opportunities

The Guatemalan woodworking machinery industry is maturing and convinced that they need improved machinery for faster, more efficient production instead of traditional manual labor. This presents an opportunity for U.S. companies. There are no local manufacturers of machinery and tool import taxes range from 0 percent to 15 percent plus the VAT of 12 percent.

CS Guatemala has good working relationship with the different entities of this sector and is in constant watch for woodworking opportunities and matchmaking by sending every year a Guatemalan delegation to a wood working show in the US. This industry is very well organized and because of that there are two local shows every year:

  • Expomueble: an expo for furniture manufacturers
  • Promueble: a show for suppliers of tools and machinery for wood.

CS is actively promoting two International Buyer Program delegations to AWFS and IWF, both excellent U.S. shows in this sector. Each show occurs every two years and Guatemala has successfully sent Guatemalan delegations looking for new machinery to both expos in the past. For further information on the Guatemalan and U.S. shows, contact the Commercial Section.

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