A train coming from the rural north Morocco to a Mediterranean port Sea does not carry any passengers. Three times a day, he brings hundreds of cars stacked bumper to bumper from one Renault factory outside Tangier to ships that transport them to European dealers.
Commercial incentives and investments in infrastructure such as the freight rail line have enabled Morocco to develop its automobile industry from virtually non-existent to the largest in Africa in less than two decades. The North African kingdom supplies more cars to Europe than China, India or Japan, and has the capacity to produce 700,000 vehicles a year.
Moroccan officials are determined to maintain the country’s role as an auto manufacturing giant by competing for electric vehicle projects. But it remains to be seen whether one of Africa’s rare industrialization success stories can remain competitive as global auto production shifts to electric vehicles and increasingly relies on automation.
More than 250 companies that make cars or their components currently operate in Morocco, where the automotive industry now accounts for 22% of gross domestic product and $14 billion in exports. French car manufacturer Renaultthe largest private employer in the country, calls Morocco “Sandero country” because it produces almost all of its Dacia Sandero subcompacts there.
Freed from the many checks and balances of democracy, the government tells companies looking to outsource production to cheaper locations that they can get approval for new factories and complete construction in as little as five months.
“15 years ago, we didn’t export a single car. It is now the country’s leading exporting sector,” Minister of Industry and Commerce Ryad Mezzour said in an interview with the Associated Press.
Mezzour said Morocco has distinguished itself from other outsourcing destinations by developing its ports, free trade zones and highways. The government has offered subsidies of up to 35% to manufacturers to set up factories in the rural hinterland outside Tangier, where Renault now produces Clios as well as Dacia Sanderos, the most popular passenger vehicle. most popular in Europe, and soon plans to start manufacturing Dacia Jogger hybrids.
Chinese, Japanese, American and Korean factories make seats, engines, shock absorbers and wheels at Tangier Automotive City, a large campus of auto parts manufacturers. Stellantis product Peugeot, Opel and Fiat in its Kénitra factory.
Devoting immense resources to developing and maintaining an automotive sector capable of employing a young and growing workforce was part of a 2014 industrialization plan. To create jobs, Mezzour said he and its predecessors strove to offer more than cheap labor to foreign automakers looking for new places to build cars and produce parts.
Major car manufacturers pay unionized workers less in Morocco than in Europe. But even with salaries equivalent to a quarter of the monthly minimum wage of 1,766.92 euros ($1,911.97) in France, the jobs pay more than the median income in Morocco. The industry employs 220,000 people, a modest but significant share of the more than 200,000 agricultural jobs that the country loses each year due to the crisis. a six-year drought.
As in many African countries, the domestic market for new cars in Morocco is limited. Fewer than 162,000 vehicles were sold there last year. The government’s success in building an automotive industry has nonetheless made automobiles the tip of the spear as Morocco strives to transform its largely agrarian economy.
“I have a simple priority: not to export or be competitive. My job is to create jobs,” Mezzour said.
Abdelmonim Amachraa, a Moroccan supply chain expert, said spending on infrastructure and training skilled workers puts the industry in a good position to attract investment from automakers seeking to expand their electric vehicle . supply chains.
Moroccan authorities have sought investment from both the East and the West, trying to attract industrial players from China, Europe and the United States as they now strive to produce at scale. scale of affordable electric vehicles. The Chinese BYD – the world’s largest maker of electric vehicles – has announced at least twice plans to build factories in the country, which were stalled before getting underway.
“The important question is what a small country can do in this world,” Amachraa said, noting how quickly global car manufacturing was evolving. “We have this ability to coexist with Europe, Africa and the United States while no link can be found between China and the United States.”
As Europe strives to phase out combustion engines over the next decade, automakers like Renault are preparing to adapt in Morocco. Mohamed Bachiri, director of Renault group operations in the country, said the successes recorded by the company in Morocco make it an attractive destination for other investors, particularly in electric vehicles.
He said the industry will likely continue to grow as Morocco’s “integration rate” – the percentage of parts that automakers can source domestically – has steadily increased to over 65%. The country also has a competitive advantage by having experienced and skilled auto workers that other outsourcing destinations lack, Bachiri said.
“We are predisposed to manufacturing cars for customers in our sector. And the day they decide they need electric vehicles, we will do it,” he said.
The government has funded public-private partnerships, such as an academy run by Renault to train technicians and managers. Compared to comparable markets, Morocco’s political climate and proximity to Europe make it a safe investment, Bachiri said.
“It’s like being on a neighboring island,” he said, pointing to instability in neighboring North and West African countries.
However, as United States and European countries are encouraging their automakers to “localize” the production of electric vehicles, it is unclear how Morocco will fare. The country has long prided itself on being a free market that avoids prices and trade barriers, but finds itself stuck as countries vying for the benefits of electric vehicle production adopt policies to protect their domestic auto industries.
Western governments that have long pushed developing countries to embrace free trade are now adopting policies to boost their own production of electric vehicles. France and the UNITED STATES both passed tax credits and incentives last year for consumers who buy electric vehicles made in Europe or North America, respectively.
Although U.S. incentives can extend to Morocco because the countries share a free trade agreement, Mezzour said they complicate the global supply chain and sometimes make its job more complicated.
“We are living in a kind of new era of protectionism,” Mezzour said. “We live in instability in terms of trade rules, which makes it more difficult for countries like Morocco which have invested heavily in open, free and fair trade.”