Over the past two decades, Morocco’s Automotive Sector has grown from almost non-existent to the largest in Africa, thanks to business incentives and infrastructure investments like a crucial freight railway line. Morocco now supplies more cars to Europe than China, India, or Japan, with an annual production capacity of 700,000 vehicles.
Moroccan authorities aim to keep the automotive sector competitive by attracting electric vehicle projects. However, the future competitiveness of Morocco, one of Africa’s rare industrial success stories, is uncertain as global auto manufacturing shifts towards electric vehicles and automation.
Currently, over 250 car manufacturing and component production companies operate in Morocco, contributing 22% of the GDP and generating $14 billion in exports. Renault, the largest private employer in the country, has dubbed Morocco “Sandero-land” due to the production of nearly all its subcompact Dacia Sanderos there.
The Moroccan government offers rapid approval and construction completion for new factories within five months to attract outsourcing companies. Minister of Industry and Trade Ryad Mezzour highlighted the industry’s growth, noting that Morocco did not export any cars fifteen years ago, but it is now the leading exporting sector in the country.
Mezzour attributed Morocco’s attractiveness as an outsourcing destination to its expanded ports, free trade zones, and highways. The government provides subsidies for manufacturers setting up factories in rural areas outside Tangiers, where Renault produces Clios and Dacia Sanderos and plans to start manufacturing hybrid Dacia Joggers.
Factories from China, Japan, the U.S., and Korea produce car seats, engines, shock absorbers, and wheels at Tangiers Automotive City, while Stellantis manufactures Peugeots, Opels, and Fiats at its Kenitra plant.
A 2014 industrialization plan aimed at developing Morocco’s Automotive Sector included substantial resource allocation to employ a young and growing workforce. Mezzour and his predecessors have focused on providing robust infrastructure and incentives to foreign automakers for car and parts production.
Moroccan factory workers earn lower wages compared to their European counterparts but still more than the median income in Morocco. Morocco’s Automotive Sector employs 220,000 workers, a notable number given the annual loss of agricultural jobs due to a prolonged drought.
Although the domestic market for new cars in Morocco is small, with fewer than 162,000 vehicles sold last year, the automotive industry’s success is central to Morocco’s efforts to shift from an agrarian economy. Mezzour emphasized that job creation, rather than exports or competitiveness, is his top priority.
Supply chain expert Abdelmonim Amachraa mentioned that investments in infrastructure and skilled worker training position Morocco well to attract automaker investments for building electric vehicle supply chains. Moroccan officials have courted investments from China, Europe, and the U.S. to produce affordable electric vehicles at scale.
Amachraa highlighted Morocco’s Automotive Sector potential to coexist with Europe, Africa, and the U.S. in the evolving global car manufacturing landscape. As Europe phases out combustion engines, automakers like Renault are adapting in Morocco. Mohamed Bachiri, director of Renault Group’s Moroccan operations, pointed out Morocco’s attractiveness for electric vehicle projects due to its rising “integration rate” of locally sourced parts and its skilled workforce.
The government has supported public-private partnerships, such as a Renault-managed academy for training technicians and managers. Bachiri noted Morocco’s political stability and proximity to Europe make it a safe investment.
However, as the U.S. and European countries encourage onshoring of electric vehicle production, Morocco’s future competitiveness is uncertain. Western governments, once advocates of free trade, are now enacting policies to protect their domestic automotive industries, complicating the global supply chain. Mezzour acknowledged that U.S. incentives, despite extending to Morocco through their free trade agreement, have complicated the global trade landscape, challenging Morocco’s commitment to open, free, and fair trade.
