Market Trends of Morocco Automotive Industry
This section covers the major market trends shaping the Morocco Automotive Market according to our research experts:
Foreign Investments from Leading Auto Manufacturers
Foreign direct investment is continually increasing as companies are attracted to the country's favorable economic conditions, government support through various initiatives (such as tax exemptions for the first five years, VAT exemptions, and land purchase subsidies), skilled workforce, and modern infrastructure.
The financial and training support provided by the national government is encouraging manufacturers and local candidates to join the industry and contribute to the country's economy.
- One of the recent investments in Morocco's automotive sector is PSA Peugeot Citroen's investment of USD 615 million for setting up its manufacturing facility
- The company aims to manufacture 90,000 B-and C-segment passenger vehicles in a year and internal combustion engines (ICE) for passenger cars for both the domestic and regional markets.
- Despite a low population and few sales of vehicles within the country, automobile manufacturers in Morocco made noteworthy exports to Europe and Middle East & Africa.
- Additionally, Morocco's integration into the global economy was facilitated by the signing of numerous free trade agreements with the European Union and the United States. These trade agreements contributed positively to the emergence of export activities in the country.
- From 2019 to 2020, Renault-Nissan alliance produced close to 588,400 vehicles in the span of two years, with the total production in two years reaching 676,000 approximately.
Increasing Demand for Passenger Vehicles
Although the industry was thriving before, the pandemic forced the sales numbers to take a dip of almost 20%, comparing 2019 with 2020. With virtually no movement, a stranded economy, and the low availability of cash, passenger car sales took a dip from 148,354 in 2019 to 117,046 in 2020 due to the pandemic.
Morocco developed an investment cluster program, which saw Renault enter the local market. Renault was the only global automaker assembling vehicles in the country until the arrival of Peugeot in 2019. Luxury car manufacturers witnessed an increase in their sales. Mercedes-Benz sold 3,105 units, and it stood as the market leader in the luxury segment, followed by BMW with 2,700 units and Audi with 2.572 units.
As part of the implementation of the Industrial Partnership agreed in June 2015 under the Effective Presidency of His Majesty King Mohammed VI, the Moroccan Minister of Industry, Trade, Green Economy, and Digital Economy stated that it had signed a new Amendment with the Stellantis Group. The collaboration formed in 2015 gains additional momentum with the signing of this agreement.
Commercial vehicle sales in the Moroccan automotive industry are expected to increase in the coming years, owing to the strategically beneficial geographical location of the country. The trade time to Spain from Morocco is one to two days for all the other European countries. This makes Morocco central to Africa's trade relations with Europe. With Morocco closing important trade relation deals with the United States, the European Union, and many Asian countries, and the majority of the deals with respect to the automotive industry, the country is expected to stabilize the market in the post-pandemic scenario.
