Over the years, Morocco has turned into an automotive industry hub and ultimately aspires to compete with China. What is the secret of this success?
In view of the advantageous geographical location, tax breaks, investment incentives, the presence of companies such as Renault, Valeo of France, Varroc Lighting Systems of the United States and Yazaki, and Sumitomo of Japan, as well as the signing of a series of Moroccan free trade agreements with Europe, the United States, Turkey, the United Arab Emirates and elsewhere, good infrastructure – most recently a new high-speed rail link between Casablanca and Tangier, Morocco has nowadays become an automotive hub”, Financial Times affirmed.
‘’Just as you’ve seen, the auto industry moves to Eastern Europe, the next logical step is North Africa’’, David Cowan, Chief Economist for Africa at Citibank, said in a statement.
In 2019, Moroccan exports amounted to about $10 billion. As any industry, the epidemiological situation had an impact on the automotive sector in 2020. However, the sector is gradually recovering this year.
Morocco’s other strength is its procurement strategy and manpower. According to “Marc Nassif”, managing director of Renault Morocco, the largest manufacturer in the kingdom, the French company sources parts, from seats to axles — almost everything, powertrains — from local suppliers, “About a third of the companies are Moroccan while the rest are foreign suppliers based in the country,” he claimed.
“For entry-level cars like Renault’s Dacia brand, where labour accounts for a higher proportion of the cost of the vehicle, this is a key incentive to set up shop in Morocco,” he continued
In the eyes of Joe Studwell, an expert on industrial policy in Asia and Africa, the growth of Morocco’s automotive industry, particularly in connection with the development of Tanger-Med (an industrial port complex), is an example of what governments can do when they decide.
By Nouhaila El Bouhli