Morocco: The Emerging Global Hub of the Automotive Industry

At the crossroads of Africa and Europe, Morocco is rapidly transforming into a global powerhouse in the automotive industry, where innovation meets tradition and opportunity knows no bounds. The country’s stable political situation, geographical advantage, business-friendly environment, and government incentives make it an attractive investment destination.

Morocco’s automotive sector has expanded significantly since Renault joined the market in 2013, followed by Group PSA and many other major players, transforming the country into a new global hub for the automotive industry.

The Moroccan automotive sector is thriving, being the leading passenger car producer in Africa and the top exporting sector of the country. With over 250 international suppliers and a 60% integration rate, the nation achieves an annual production of 700,000 vehicles. In 2023, exports surged by 27%, reaching $14 billion. Additionally, Morocco’s geostrategic location provides easy access to major markets and its proximity to Europe, just 14 km away, along with being the top sea connectivity hub in Africa. The sector benefits from a well-trained, competitive workforce and world-class industrial zones..

Major players such as Renault, PSA, Toyota, and Ford have invested significantly in the country. Renault’s manufacturing plant in Tangier is notable for being both zero carbon and zero industrial liquid emissions. Additionally, local players like Somaca (Société Marocaine de Construction Automobile) are important contributors to the sector, often engaging in partnerships with international manufacturers or producing vehicles under license agreements.

Morocco has demonstrated outstanding expansion capacity, with international manufacturers expanding their production or investing in new facilities, reflecting the country’s attractiveness as an automotive manufacturing hub. The country has established an extensive network of Free Trade Agreements (FTAs) that provide access to over 50 countries and 1.3 billion consumers. These agreements include FTAs with major economic partners such as the European Union, the United States of America, Türkiye, and the United Kingdom of Great Britain and Northern Ireland. Additionally, Morocco is part of the European Association for Free Trade (EAFT) with Iceland, Liechtenstein, Norway, and Switzerland. Regionally, Morocco has FTAs with Jordan, Tunisia, and Egypt under the Agadir Agreement, and it participates in the Greater Arab Free Trade Agreement (GAFTA) with numerous Arab countries. Furthermore, Morocco is a member of the African Continental Free Trade Area (AfCFTA), enhancing its connectivity and trade opportunities across the African continent.

In light of these advancements, Chinese companies like Gotion High-Tech are collaborating with Morocco to transform it into a major hub for electric car battery production and export, with investments totaling at least 2.45 billion euros. This partnership underscores Morocco’s strategic importance and growing influence in the global automotive industry.

Looking ahead, Morocco aims to achieve an 80% integration rate and produce 1 million cars by 2025, alongside fully decarbonizing production. These targets will position Morocco as the most competitive automotive platform globally and attract new categories of players into its already comprehensive ecosystem.

With competitive production costs, the local automotive supply chain lowers costs and reduces dependency on imports. In addition to conventional vehicle production, there is a growing interest in electric cars, with the government and industry stakeholders promoting EV adoption through incentives and infrastructure development. Moreover, there is a rising emphasis on sustainability and environmentally friendly practices within the automotive sector. Companies are adopting green technologies and implementing eco-friendly manufacturing processes to reduce carbon emissions and environmental impact. These trends collectively reflect the dynamic nature of the automotive sector in Morocco and its alignment with global industry shifts towards sustainability, innovation, and market expansion.

On the other hand,Türkiye, ranked as the 12th largest automotive manufacturer globally and the 3rd largest in Europe, stands at the forefront of the automotive industry. The partnership between Türkiye and Morocco in this sector presents an exceptional opportunity for both emerging economies. Despite a significant trade deficit favoring Turkish exports, Türkiye imports over half a billion dollars’ worth of automotive goods from Morocco, highlighting this sector as a focal point for mutual collaboration where both countries can benefit from sharing expertise, technology, and resources.

With Türkiye’s established leadership in vehicle production and Morocco’s strategic location and expanding industrial capabilities, collaborative efforts can drive innovation, particularly in electric and green energy-based vehicles. Furthermore, Türkiye’s pioneering domestically produced electric car brand, TOGG, combined with Moroccan innovations like NEO and Namix, underscores the potential for joint investments aimed at competing against Chinese dominance. This collaboration not only enhances market competitiveness but also strengthens economic ties, fostering sustainable growth in both nations.