Morocco is a major player in the automotive industry in Africa, surpassing South Africa and positioning itself as a production and export hub. The country aims to become an electric vehicle hub, developing local manufacturing of batteries and electric motors. These projects are expected to create 7,100 new direct jobs by 2027.
Automotive production and exports from Morocco
Morocco is on the way to becoming the leading African country in automotive production.
- Morocco aims for an annual production capacity of 700 thousand to 1 million vehicles.
- Moroccan car production reached 430,000 units in 2018. The sites of Tangier (340,000 units) and Casablanca (90,000 units) contributed to this performance.
- Automotive exports reached a record 141.76 billion dirhams (14 billion USD) in 2023, an increase of 28 percent over the previous year.
- 90% of Moroccan production goes to European markets.
Employment and investment in the automotive sector
To attract more automotive manufacturers, the Moroccan government could adopt several key strategies.
Improving the business environment
- Modern infrastructure: Continue to develop high-quality transport and logistics infrastructure, including free zones and integrated industrial platforms.
- Favorable regulation: Simplifying administrative procedures and aligning regulations with international standards to facilitate the establishment of businesses.
Financial incentives
Investment grants: Provide grants or tax credits for new investors, particularly those who commit to integrating sustainable technologies or creating local jobs.
Development Fund: Use the Industrial Development and Investment Fund to finance up to 30 % of investment projects, thus facilitating access to land.
Training and skills development
- Training institutes: Strengthen training institutes for automotive trades to ensure that the local workforce has the necessary skills.
- Business partnerships: Encourage businesses to work with universities and research centers to develop training programs tailored to the needs of the sector.
International promotion
- Promotional campaigns: Carry out international campaigns to promote Morocco as an automotive hub, highlighting its assets such as proximity to Europe, quality of infrastructure, and skilled workforce.
- Participation in international trade fairs: Participate actively in international trade fairs and fairs to present investment opportunities in the Moroccan automotive sector.
Support for innovation
- R&D investment: Encourage investment in research and development to foster innovation in the automotive sector, including in green and digital technologies.
- Start-up partnerships: Create the right environment for technology start-ups to collaborate with major car manufacturers, thus fostering collaborative innovation.
Builders and Ecosystem
Morocco is attracting more and more international car investors. Renault, Peugeot (Stellantis) and BYD are among the leading manufacturers in Morocco. Thanks to free trade agreements with the European Union, the United States and several African countries, Morocco’s automotive sector has easier access to international markets.
- The Renault plant in Tangier has an annual capacity of more than 400,000 vehicles
- The Citroën (Stellantis) plant plans to reach 100,000 units by 2027
Morocco already has a production capacity of 40,000 electric cars per year and aims to increase it to 100,000 by 2025.
The main challenges of the Moroccan automotive sector
There are several major challenges facing the Moroccan automotive sector. These challenges include growing global competition, the rapid shift to decarbonization in the automotive industry, and the need to keep pace with technological advances such as autopilot and electric vehicles.
- Automotive suppliers scaling up: Automotive suppliers developing technological equipment could get directly closer to end customers, changing market dynamics.
- Declining prospects for the European market: The diminishing prospects for the European market represent a challenge for the Moroccan car industry.
- Lack of some important segments of the cluster: The absence of some key segments and limited spillovers to related clusters can hamper development.
