The automotive industry has been one of the export sectors most affected by the Covid-19 crisis. Jobs are logically threatened there, recognizes a source at the Ministry of Industry, which however wishes to put things into perspective, explaining that several signals suggest that the layoff plans will be less violent than in other sectors of the economy.
In Morocco, the automotive industry is one of the sectors that has been most affected by the Covid19 crisis. Focused primarily on export, this industry collapsed altogether during the three months of confinement. The export figures of Moroccan industrialists are edifying in this regard.
In March, international flows fell by 85%, to fall again by 72.6% in April and then by 88.6% in May, according to figures presented to Parliament by the Minister of Finance. Far, very far from the positive trend taken at the start of the year, with export trends of 6.7% in January and 8% in February.
A 40% drop in exports between January and May
The results of the races, according to statistics from the Foreign Exchange Office: between January and May, automobile exports fell by nearly 40%, all sectors combined. By business line, it was “wiring” which experienced the biggest drop (-48.6%), followed by “construction” (-36.5%) then by the “Interior vehicles and seats” segment (-36.5%).
With textiles (-33.8%), the automotive industry is emerging as the biggest victim of the Covid crisis. Sectors such as aeronautics and agro-industry limited their export losses to 14.6% and 6.3% respectively.
A shock that a source at the Ministry of Industry explains by the collapse of international demand and the blocking of all production chains worldwide.
“This sharp drop in Moroccan exports is logically linked to the problems that have arisen on international markets. Our industry relies heavily on foreign contractors, who were virtually all shut down during the three months of lockdown,” our source explains.
Downsizing is expected
What impact has this shock had on jobs in the sector? Our source tells us that with factories shut down, the majority of the workforce has been put on short-time work, but on the recovery, manufacturers have not returned to the same level of employment.
“We don’t have the figures for the moment for job losses in the automotive industry, but what I can tell you is that in June, we were at 82% of the workforce compared to the period before Covid-19, in all industrial branches of the country”, specifies our source.
As in aeronautics, where professionals in the sector are already announcing potential job losses of nearly 20%, the automobile industry will also be affected by the wave of layoffs. A legitimate wave according to the logic of an industrialist who must calibrate his charges to his level of activity.
“We follow this subject on a daily basis and we are in constant contact with the automotive industry to know their projections”, assures our source to the ministry, without advancing on a figure.
This wave of layoffs in the automotive industry has already started globally, including among companies with a large presence in Morocco. Example of the French equipment manufacturer Valeo which announced last week a plan to cut 12,000 jobs worldwide in the first half of the year, including 2,000 in France. So 10,000 jobs are targeted at other industrial sites around the world, including those in Tangier, which have no less than 1,000 employees.
Morocco relies on its competitiveness to save its industrial fabric
“There will certainly be positions affected in Morocco, but not at the same level as in the rest of the world”, however qualifies our source. “When there is a problem or a drop in business, manufacturers start by downsizing or closing less competitive factories. However, Moroccan automotive factories are among the most competitive in the world,” explains our source.
Competitiveness is, according to our source, what will save the Moroccan auto industry. This setting will reduce the risk of site closures and staff cuts and may even bring new business when the global market picks up, explains our contact.
“We saw it already in June. With the recovery of European markets, Moroccan exports of both parts and vehicles have resumed … This is a good signal and it shows that Morocco will be one of the countries that will benefit from the recovery of the sector in the world”, says our source, who says he is “optimistic” about the future.
There are reassuring trends that represent good news for the Moroccan auto industry, she explains. Two phenomena in particular are noted by our source:
– “The recovery plans in Europe which have boosted the automotive market, which will directly impact the exports of Moroccan equipment manufacturers”.
– And “the renewed interest in cars in European and global markets caused by the spread of the virus and the incompatibility of mass mobility with current circumstances”.
Our source gives us the example of the Citroën AMI, a low-cost electric car produced by PSA in Kénitra. “This model is currently enjoying great success in Europe in particular. It is selling like hot cakes, to the point that sales greatly exceed PSA’s initial projections,” says our source.
Very dependent on French industrialists, Morocco was, as a reminder, spared the wave of relocation announced on May 26 by President Emmanuel Macron. This plan, which aims to repatriate the factories of French manufacturers located outside France, only concerns the electric and hybrid segments. Sectors with little presence in Morocco, where Renault and PSA mainly manufacture diesel and gasoline vehicles.