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Coronavirus: The automotive industry heavily impacted in Morocco

The Renault and PSA factories are shut down. The equipment manufacturers making up their ecosystems are following suit. Update on the impact of the coronavirus crisis on Morocco’s leading export sector.

Renault Maroc announced, on March 17, the temporary suspension of its industrial activities without specifying a date for resumption. The following day, it was PSA which declared the suspension of its activities for two weeks, from March 19. A period which risks being extended.

11,000 employees across the two Renault factories and more than 1,600 employees for PSA are affected in Morocco. Or more than 17,000 employees for the two manufacturers.

Behind the decision of these two locomotives of the automotive industry in Morocco, an entire ecosystem finds itself almost stationary with tens of thousands of employees unemployed. As a reminder, this industry employs nearly 180,000 people.

Nearly 250 automotive suppliers operate in Morocco, making up nine ecosystems: wiring, vehicle & seat interiors, metal stamping, battery, PSA, engines, Renault, Delphi and Valeo.

Are these equipment manufacturers all stopped today? It is difficult to answer this question clearly. Because certain ecosystems are linked to the manufacturers present in Morocco, while others are export-oriented and therefore integrated into a global value chain. Some operators belonging to the latter category “were able to continue operating as long as their customers kept orders”, explains an industry source.

“Until ten days ago, some equipment manufacturers continued to produce because all the manufacturers were not stopped worldwide,” he says. “But the situation is changing every day, decisions to contain and stop business are chained around the world, and even those who still had active customers today face the stopping of orders”, continues our source.

Most of the industry produces “just in time” with zero stock. Without firm orders, equipment manufacturers cannot therefore continue to produce and stock in anticipation of a future recovery.

According to our information, the profession has set up an internal watch unit to monitor the situation. This unit has been monitoring daily for the past few days to identify all the closings and the number of jobs affected.

The crisis meetings have been linked up since at least Monday 23 March. The objective is to have a real and precise picture of the situation in the sector in order to defend the interests of the industry within the framework of the Economic Watch Committee to face the consequences of the covid-19 crisis.

The automobile industry will require, like other sectors, specific support measures. The profession is working on these measures and does not hesitate to project itself at the time of recovery.

Our attempts to reach the Amica office went unanswered. What is certain is that exports will be strongly affected for several weeks without any visibility on the recovery.

This unexpected and unprecedented crisis could seriously undermine Moroccan ambitions which, moreover, had been revised upwards in 2019. The Minister of Industry had announced that:

– annual production capacity would reach 1 million vehicles by 2022, through extensions of existing manufacturers or the installation of new manufacturers.

– the turnover in export should reach MAD 100 billion against 70 billion initially. The ministry even wanted to revise this target upwards and bring it to MAD 200 billion by 2025.

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