Credit By: Arabian Business
Morocco’s automotive industry experienced significant growth in 2023, with exports reaching $13.9 billion, marking a 27% increase compared to the previous year. This growth milestone positioned the automotive sector as the country’s largest exporting industry, surpassing the phosphate business.
Factors Driving Growth
Several factors contributed to the expansion of Morocco’s automotive industry. The automotive wiring harness industry, responsible for assembling electrical components within vehicles, witnessed a remarkable 32% increase in exports. Additionally, the car construction industry, covering the fabrication and assembly of vehicle components, experienced a commendable 22% annual growth rate. Similarly, the powertrain industry, focusing on manufacturing internal vehicular systems, recorded a notable 25% increase in exports.
Evolution of Morocco’s Automotive Sector
Since its inception in 1957, Morocco’s automotive sector has significantly transformed from vehicle assembly to full-fledged production. 2021 the country manufactured over 400,000 units, with exports totaling $8.3 billion. This growth trajectory has led to the creation of approximately 220,000 jobs and the emergence of a robust network of over 230 Tier 1 and 2 suppliers, contributing to a commendable local integration rate of 60%.
Government Policies and Business Environment
Favourable government policies have facilitated Morocco’s automotive industry growth, including the Industrial Acceleration Plan 2014–2020 and the establishment of industrial parks and automotive cities like Kenitra and Tangier. These initiatives have fostered a business-friendly environment, attracting domestic and international investors. Furthermore, Morocco’s integration into the global economy through free trade agreements has enhanced its attractiveness to investors, as highlighted in the 2023 UNCTAD report.
Future Ambitions and Strategies
Morocco has ambitious goals for its automotive industry, aiming to achieve an annual production of one million cars by 2025 while increasing the local integration rate to 80%. Already, the country has achieved an impressive yearly production capacity of 700,000 vehicles. Strategies for achieving these goals focus on enhancing local integration, expanding industrial activities, upgrading the value chain, facilitating technology transfer, and diversifying export markets.
Prominent Industry Players and Market Focus
Major automotive groups, including German Motor Distributors, Renault, Snop, Stellantis Sumitomo Electric Wiring Systems, and Yazaki, have invested significantly in Morocco’s automotive industry. Despite low domestic vehicle registration, Morocco’s automotive sector primarily targets the European market. For instance, Renault exports most of its production, and the Citroen Ami, produced in Kenitra, became Spain’s best-selling vehicle in 2022.
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