Over the years, Morocco has transformed itself into an automotive hub and ultimately aspires to dethrone China. What is the secret of this success?
Advantageous geographical location, tax breaks, investment incentives, presence of companies such as Renault, Valeo from France, Varroc Lighting Systems from the United States and Yazaki and Sumitomo from Japan, signing of a series of free-trade agreements Moroccan exchanges with Europe, the United States, Turkey, the United Arab Emirates and elsewhere, good infrastructure (more recently a new high speed rail link between Casablanca and Tangier… ), Morocco has become an automotive hub, explains Financial Times.
“Just as you’ve seen the auto industry take hold in Eastern Europe, the next logical step is North Africa,” says David Cowan, chief economist for Africa at Citibank. In 2019, Moroccan exports amounted to around $ 10 billion. Like any sector of activity, the related health crisis has had an impact on the automotive sector in 2020. This year, the sector is gradually recovering.
The other strength of Morocco is the procurement strategy and the workforce. According to Marc Nassif, managing director of Renault Maroc, the kingdom’s largest automaker, the French company sources parts, from seats to axles – almost everything, powertrains – from local suppliers. “About a third of the companies are Moroccan while the rest are foreign suppliers based in the country,” he said. “For entry-level cars like Renault’s Dacia brand, where labor represents a higher proportion of the cost of the vehicle, this is a key incentive to locate in Morocco,” explains Marc Nassif.
In the eyes of Joe Studwell, an expert in industrial policy in Asia and Africa, the growth of the Moroccan automotive industry, particularly in connection with the development of Tanger-Med, an industrial port complex, is an example of what governments can do when they decide.