Overcame European countries, including Italy
Morocco turns into a center for the auto industry
The lower costs of labor compared to Europe constituted a strong incentive to choose manufacturing in Morocco.
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Car factories in Morocco employ 220,000 people.
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Morocco imports about 160,000 new cars annually, which is a relatively small number compared to its population of 36 million people. Despite modest sales, Morocco has gained a reputation as a center for the automotive industry, and in 2018 it overcame South Africa, which is the largest exporter of passenger cars on the continent. African. "Just as we've seen the auto industry move into Eastern Europe, the next logical step is North Africa," said David Cowan, chief economist at Citibank.
The value of car exports in 2019 amounted to about 10 billion, and although it decreased in 2020 as a result of the “Corona” pandemic after the decline in supply and demand, it recovered this year. About 80% of the cars manufactured in Morocco, amounting to about 400,000 cars, are sold to European countries, such as France, Spain, Germany and Italy, and there are other markets such as Turkey and the Middle East, and few of them are sold to the rest of the African continent, a market that is currently Acceptable in theory, thanks to the African Continental Free Trade Area, a trade bloc that came into operation this year. The Moroccan auto industry currently directly employs 220,000 people, most of whom work in about 250 companies with deep roots in the country, since the automotive industry began in it, and gained strength about a decade ago.
The presence of companies such as the French Valeo, the American Farrok Lighting System, and the Japanese Yazaki and Sumitomo shows that Morocco has achieved some success in finding some kind of integration for this industry, by requiring only local suppliers to deal with. The managing director of Renault Cars in Morocco, Mark Nassif, which is the largest car maker in the country, says that the French company gets the car parts from the seats to the axles, and almost most of the transmission parts are from local companies. Nassif estimates that a third of the companies are Moroccan, while The rest are foreign companies residing in the country.
He says that the locally-made parts constitute 60% of the final output, a figure that is expected to rise to 65%, and Nassif adds that "the government has many demands, but it also provides a lot of support to the auto industry," noting that the tax exemptions that are being talked about Frequently, along with investment incentives that are less generous than those offered by other countries, are not the main reason behind the success of the auto industry.
In addition to the good infrastructure, most recently the high-speed railway between Casablanca and Tangier, where the bulk of Renault’s production is produced, Nassif highlighted the smooth government policy, and production companies could go to “one place” to clear their affairs in the Ministry of Foreign Affairs. commerce and industry, rather than engaging in struggles against competing bureaucratic fiefdoms, Nassif said.
As for exports, Moroccan automakers benefit from free trade agreements that Morocco has with Europe, the United States, the United Arab Emirates, and elsewhere.
The workers, who are recruited locally, are trained in local Moroccan technical institutes, another design sign to ensure that the industry is constantly developing.
But how did Morocco transform from a country that is not so important in the field of car manufacturing a few decades ago, to one of the countries that compete with European countries such as Poland, the Czech Republic, and even Italy?
It is the story of the state's intervention in this field to secure the appropriate support for it.
One of the articles published on this subject carried the title "Yes, we are planning."
British expert and author, Joe Stadwell, in the field of industrial policy in both Africa and Asia, believes that the growth of the automotive industry in Morocco, especially in relation to the development of Tangiers, an industrial port complex, is an example of what governments can do when they are serious about developing He says that the main key to this development is by providing government supervision, and with strong competition from the private sector, and a great focus on exporting to foreign markets, the defects, whether in efficiency or in quality, are revealed in a flagrant way, and the geographical location is also beneficial. Stadwell says: “If you work in Tangiers, you are very close to Spain, and the costs will be completely different,” he points out, referring to Morocco's proximity to Europe and its cheap labor.
Labor costs in Morocco are 25% higher than in Spain, and lower than in Eastern Europe. For example, with regard to cars such as Renault and Dacia, where labor constitutes a large part of car costs, as well as for low-cost cars, such as Dacia, where labor constitutes the bulk of car costs, all of this encourages It should be a strong incentive to choose industrialization in Morocco, according to Nassif.
There are strong indications that this industry will expand further. In 2019, the Peugeot automobile company opened a manufacturing facility in the Kenitra region, north of Rabat, and began producing Peugeot 208 cars, and it will have the capacity to manufacture 200,000 cars by the end of this year. . BYD, a Chinese company that manufactures electric cars, has signed a memorandum of understanding with the Moroccan government, to open a facility in Kenitra that could represent a bigger step towards technological change, and Hyundai, which recently left Algeria, may consider opening a facility. In Morocco, according to relevant reports.
Kwan from Citibank Al-Maghrib says that there is still room for caution. “If I walk around the Tangier factories, I don't see humans, but only robots, and accordingly, the unemployment numbers have not moved significantly,” Kwan added, “For the auto industry to make a big change in the economy. Creating jobs and income Progress must be made on locally sourced high-value components, including batteries, and eventually also engines, but how will the auto industries' production-appropriate components be secured?
This is the next challenge that is, for me, the pivotal achievement of the auto industry project.”
David Bailing ■ Financial Times Africa editor
• In 2018, Morocco beat South Africa, which is the largest exporter of passenger cars in the African continent.
• The presence of companies such as the French Valeo, the American Farrok Lighting System, and the Japanese Yazaki and Sumitomo shows that Morocco has achieved some success in finding a kind of integration for this industry.
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