Paraguay’s maquila system, a cornerstone of the nation’s export economy, has recorded robust growth, with exports rising by 4% to US$649.9 million in the first half of 2025 compared to the same period last year. Leading the charge is the auto parts sector, particularly wires and cables, which saw a striking 26.4% increase and now accounts for 32.6% of total maquila exports. 2024 was already a record breaking year for the industry.
A maquila is a manufacturing operation where companies import materials duty-free, assemble products using local labour, and export the finished goods. Located in free trade zones, it leverages tax incentives and low labour costs to boost economic growth and add domestic value before export.
Global brands boost local manufacturing
The Central Bank of Paraguay reports that exports of wires and cables for auto parts reached US$212.3 million by July 2025, up from US$168 million in 2024 and US$154.6 million in 2023. This steady ascent highlights the sector’s critical role, supported by approximately 20 Paraguayan industries manufacturing for global brands such as Toyota, Volkswagen, Honda, Renault, and Caterpillar. These firms capitalise on Paraguay’s competitive manufacturing environment to produce high-quality components for vehicles and machinery.
While auto parts dominate, other sectors are also thriving. The pharmaceutical industry recorded a 32% rise in exports, and footwear shipments under the maquila system grew by 33%. These gains reflect the broadening scope of Paraguay’s export portfolio. The government is actively seeking to modernise the maquila system to include services, further enhancing its economic potential.
Paraguay’s maquila exports: key markets
Brazil remains the primary destination for Paraguay’s maquila exports, commanding a 65.4% share. Argentina follows with 14.6%, and the United States accounts for 3.8%. In 2024, total maquila exports reached US$1.119 billion, with consumer goods contributing US$1.087 billion and intangible services adding US$32 million.
As Paraguay continues to refine its maquila framework, the dominance of auto parts, alongside rising contributions from pharmaceuticals and footwear, signals a promising trajectory for export-led growth. With global demand for Paraguayan goods on the rise, the nation is cementing its status as a vital player in regional manufacturing.
