Morocco; The leading car manufacturer in Africa
The automotive sector is already Morocco’s leading export sector and has made the Kingdom the leading car manufacturer in Africa
Here are some reasons for this success:
- The Kingdom’s fast integration into the global economy was also facilitated by numerous free trade agreements with the United States and the European Union. These agreements contributed undoubtedly in a positive way towards the emergence of export activities in the country.
- Foreign direct investment has been expanding as companies are attracted towards the favorable economic situation of the country, government support through their numerous initiatives, such as tax exemptions for the first 5 years and VAT exemptions, modern infrastructure, and a skilled workforce.
- Moreover, the automotive sector has the strongest job creation; 85’000 new jobs were created in the sector between 2014 and 2018, bringing the total jobs in the sector to 158’000.
Morocco has two major “traditional” car manufacturers: Renault and PSA.
The Chinese company BYD is a pioneer when it comes to electric cars and Morocco has signed a memorandum of understanding with the Chinese automaker to set up an electric car factory near Tangier, the first of its kind in the country.
Production and exports are expected to continue to rise thanks to the recent launch of a second production line by Renault. The production of the plants reached 402’000 vehicles in 2018.
Other recent investments in Morocco’s automotive sector include PSA Peugeot Citroen’s investment of USD 615 million in setting up their manufacturing facility which is expected to be operational in 2019. Production at the PSA plant projects to be 200’000 vehicles and boasting a total production capacity of 700’000 cars.
Morocco could soon welcome new names (in two to three years), such as Toyota and Hyundai, having already shown their interest in the attractive conditions offered. Following the example of Renault, they could take advantage of the skilled work pool that has been created and a network of more than 200 automotive suppliers.
Lear, The American group, with 11 plants in the country is the leading automotive supplier, followed by Yazaki, Sumitomo, and Leoni and many others such as Denso, Kromberg & Schubert, Takata, Furukawa, Fujikura, TE connectivity, Valeo, Faurecia, Daedong System, Hirschmann, Delphi, Magnetti Marelli, COMSAEMTE, Parker, Clarton Horn, Deltrian, Inergy Automotive System, Varroc Lighting System, JTKET, Processos industriales Del Sur… In the medium term, the goal is to attract nearly 50 other industrialists.
New ecosystems have been established such as wiring, vehicle interior and seats, metal stamping, battery, etc.
However, there are still numerous missing elements: sunroofs, leather seats, instrument panels, foundry, screws, tires, radios and screens.
To boost investment in these activities, Morocco intends to encourage Moroccan capital and joint ventures.
AIMS International’s automotive practice group is perfectly positioned to assist emerging markets such as Morocco. With proverbial grey hair earned in the US and EU markets, the team supports the local Moroccan office in partnering with clients setting up and expanding their organisations in this complex industry. Our Moroccan office is highly skilled at delivering this service in collaboration with niche industry skills and years of experience finding and growing talent.