Morocco’s Automotive Industry Pivots Towards Electric Vehicles as Global Competition Intensifies

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Transformative change is underway in the African automotive industry as trade begins under the African Continental Free Trade Area (AfCFTA). The continent’s auto industry, valued at $30.44 billion in 2021, is expected to grow to $42.06 billion by 2027 — a nearly 40% increase in value.

In the sprawling car park of Renault’s manufacturing facility on the outskirts of Tangier, thousands of brand new vehicles await transport to the nearby port of Tanger Med, destined for markets across Europe. This scene symbolizes the remarkable success of Morocco’s automotive sector, which continues to break records in production and exports year after year.

Morocco’s Minister for Trade and Industry, Ryad Mezour, attributes this success to the country’s unparalleled competitiveness and commitment to sustainability, making it an attractive destination for automotive manufacturing. With over 250 companies operating in the sector, including French automaker Renault, which affectionately calls Morocco “Sandero-land” due to its production of the popular Dacia Sandero, the industry has become a cornerstone of the nation’s economy, contributing 22% to GDP and $14 billion in exports.

With an eye toward the future, Moroccan officials are aggressively positioning the country as a hub for electric vehicle (EV) production, recognizing the global shift away from combustion engines. This strategic focus has led to substantial investments in infrastructure and incentives for manufacturers, including subsidies of up to 35% for establishing factories in rural areas and streamlined approval processes for new projects.

Mohamed Bachiri, director of Renault Group’s operations in Morocco, emphasizes the country’s pivotal role in the company’s international industrial strategy, highlighting plans to expand production capacity to accommodate the growing demand for EVs. Morocco’s ambition extends beyond domestic production, with plans to export “Made in Morocco” vehicles to over seventy countries worldwide.

The government’s emphasis on job creation and competitiveness has been central to its industrialization efforts. While labor costs in Morocco are lower than in Europe, factory jobs in the automotive sector provide significant income opportunities for local workers, mitigating the impact of agricultural job losses due to persistent drought conditions.

In its quest for investment, Morocco has courted partners from East and West, attracting interest from Chinese, European, and American companies. However, the country faces challenges as Western nations implement policies to incentivize domestic EV production, potentially disrupting global supply chains and complicating trade dynamics.

As Morocco navigates these evolving market forces, the future of its automotive industry hangs in the balance. While the country’s strategic location, stable economic environment, and skilled workforce continue to attract investors, the shifting landscape of global trade presents both opportunities and obstacles on the path to sustainable growth and competitiveness in the EV era.

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