Automotive industry: The Ukrainian market relocated to Morocco

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Morocco consolidates its position as an attractive country in terms of heavy investments. This industrial policy, which has been in place for some time, makes the Kingdom a highly coveted country on the international market. With the impressive establishment of industrial industries, particularly automotive, Morocco no longer hides its ambitions. The war in Ukraine has revealed Morocco’s position as a competitor to industrialized countries.

The relocation of automotive investments out of Ukraine, due to the ongoing war, is accelerating the development of the Moroccan automotive industry. In March 2022, Japanese electrical wire and fiber optic cable manufacturer Sumitomo Electric Industries announced that due to Russia’s invasion of Ukraine, it is moving its cable harness production from Ukraine to its factories in Romania and Morocco. It has been reported that the move will cost nearly 900 million dirhams and that Sumitomo’s customer Volkswagen Group will cover part of the sum. Volkwagen was forced to halt production at its Zwickau and Dresden plants on February 25, 2022 for three weeks due to a shortage of harnesses from its supplier in Ukraine, suggesting the automaker has every interest in helping to relocation. Additionally, Irish auto parts maker Aptiv announced on April 6, 2022 that it will also relocate its factory from Ukraine to Morocco. The builder estimates that the move will take about six weeks. These measures show that Morocco is rapidly becoming an attractive alternative for car manufacturers and we believe that this will contribute to the development of Moroccan industry in the short term, in particular the parts and components segment.

Morocco, like Ukraine, is attractive to automakers due to its low operating costs, well-established automotive supply chains and proximity to the European market. Morocco’s workforce demographics are particularly attractive to automakers, compared to those of Central and Eastern European countries.

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