Summary
– Morocco’s automotive industry went from non-existent to the largest in Africa in under two decades
– Major automakers have factories in Morocco to take advantage of business incentives and infrastructure investments
– The government offers subsidies and quick approval for new factories, leading to expansion in the industry
– Morocco is now looking to compete in electric vehicle projects and is focusing on job creation
– The country’s automotive sector has potential for attracting investment in electric vehicle supply chains, but may face challenges from changing global trade policies.
Article
The automotive industry in Morocco has experienced significant growth over the past two decades, becoming Africa’s largest producer of cars and exporting more vehicles to Europe than countries like China, India, or Japan. The Moroccan government has incentivized businesses and invested in infrastructure like the freight railway line to support this growth, attracting more than 250 companies involved in manufacturing cars or their components. The industry now accounts for 22% of the country’s GDP, with exports amounting to $14 billion. French automaker Renault is one of the largest employers in Morocco, producing popular models like the Dacia Sandero.
The government’s quick approval process for new factories has made Morocco an attractive outsourcing destination for automakers looking for cheaper production options. Subsidies of up to 35% have been offered to companies to establish factories in rural areas outside Tangiers, where Renault currently produces various models including the Dacia Sandero and plans to start manufacturing hybrid vehicles. The Tangiers Automotive City houses factories from various global automakers like Stellantis, manufacturing a range of car components. The focus on developing the automotive sector has been part of an industrialization plan to create jobs for Morocco’s young workforce.
Morocco’s success in creating an automotive industry has led to the sector becoming a significant source of employment for the country, with over 220,000 individuals employed in the industry. While factory workers are paid less than their European counterparts, the jobs provide a higher salary than the median income in Morocco, helping to offset the loss of agricultural jobs due to drought. The country’s small domestic market for new cars has been bolstered by the success of its automotive industry, which has become integral to transforming Morocco’s economy from agrarian to industrial.
The government’s investment in infrastructure and training has positioned Morocco as an attractive destination for automakers looking to establish electric vehicle supply chains. Moroccan officials have sought investments from both Eastern and Western automakers to capitalize on the shift towards electric vehicles. While the country’s proximity to Europe and experience workforce provide a competitive advantage, changing global dynamics in the automotive industry could pose challenges. Western governments are implementing policies to encourage onshoring of electric vehicle production, potentially impacting Morocco’s position as a key automotive manufacturing hub.
As Morocco aims to adapt to the evolving landscape of global automotive production, there are uncertainties surrounding the impact of protectionist trade policies and the transition to electric vehicles. Government officials are navigating changing trade rules and policies that may complicate Morocco’s position as a free-market economy that promotes open and fair trade. Morocco’s success in attracting investment and growing its automotive sector will rely on its ability to adapt to the shifting dynamics of the global automotive industry and continue to provide a competitive manufacturing environment for automakers.
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