TANGIER, Morocco – A train from the rural north Morocco to a port in the Mediterranean Sea does not carry passengers. Three times a day, he brings hundreds of cars stacked bumper to bumper from one place to another Renault factories outside Tangier to ships that transport them to European dealers.
Business incentives and investment in infrastructure such as freight rail have enabled Morocco to thrive Automotive branch 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 is capable of producing 700,000 vehicles a year.
Moroccan officials are determined to maintain the country’s role as an auto industry behemoth by competing for a living electric vehicle projects. Time will tell whether one of Africa’s few industrialization success stories can remain competitive as global car production shifts to electric vehicles and relies increasingly on automation.
There are currently over 250 companies producing cars or car parts in Morocco, where the car industry currently generates 22% of gross domestic product and $14 billion in exports. French carmaker Renault, the country’s largest private employer, calls Morocco “the land of Sandero” because it produces almost all of its subcompact Dacia Sanderos there.
Unencumbered by many of the checks and balances of democracy, government informs companies that want to outsource production to cheaper locations that they can get approval to build up-to-date factories and complete construction in as little as five months.
“15 years ago, we didn’t export a single car. It is currently the first export sector in the country,” Industry and Trade Minister Ryad Mezour said in an interview with The Associated Press.
Mezzur said Morocco stands out from other outsourcing destinations by expanding its ports, free trade zones and highways. The government has offered manufacturers subsidies of up to 35% to locate factories in rural areas near Tangier, where Renault currently produces the Clio and Dacia Sanderos, Europe’s most popular passenger vehicle, and soon plans to start producing hybrid Dacia Joggers.
Chinese, Japanese, American and Korean factories produce seats, engines, shock absorbers and wheels at Tangiers Automotive City, a enormous campus of auto parts manufacturers. produces Stellantis Peugeots, Opels and Fiats at the factory in Kenitra.
Devoting massive resources to developing and sustaining an automotive sector that could employ a adolescent and growing workforce was part of the 2014 industrialization plan. To create jobs, Mezzur said he and his predecessors focused on offering more than just low-cost power working hours for foreign car manufacturers looking for up-to-date places to build cars and produce parts.
Major car manufacturers pay unionized factory workers less in Morocco than in Europe. But even at a quarter of France’s monthly minimum wage of 1,766.92 euros ($1,911.97), jobs earn more than the average income in Morocco. The industry employs 220,000 workers, which is a diminutive but significant portion of the more than 200,000 agricultural jobs the country loses each year due to six-year drought.
As in many African countries, the domestic market for up-to-date cars in Morocco is diminutive. Last year, less than 162,000 were sold there. vehicles. Nevertheless, the government’s success in building the automotive industry has made cars the tip of the spear as Morocco works to transform it mainly agricultural economy.
“I have one basic priority – not exporting or being competitive. My job is to create jobs,” Mezzur said.
Abdelmonim Amachraa, a Moroccan supply chain expert, said spending on infrastructure and training skilled workers put the industry in a good position to attract investment from automakers looking to build their electric vehicles supply chains.
Moroccan officials have sought investment from both the East and the West, trying to lure industry players from China, Europe and the United States who are currently racing to produce large-scale affordable electric vehicles. Chinese BYD — the world’s largest electric vehicle maker — has announced plans to build factories in the country at least twice, but they stalled before they could begin.
“The gigantic question is what can a diminutive country do in this world,” Amachraa said, noting how quickly global car production is changing. “We have this ability to coexist with Europe, Africa and the United States when you can’t find a link between China and the United States.”
As Europe works to phase out internal combustion engines over the next decade, carmakers such as Renault are preparing to adapt in Morocco. Mohamed Bachiri, Renault Group’s chief operating officer in the country, said the company’s success in Morocco makes it an attractive place for others to invest, especially in electric vehicles.
He said the industry is likely to continue to grow as Morocco’s “integration rate” – the percentage of parts that automakers can source in the country – continues to rise to more than 65%. The country also has a competitive advantage by having experienced and skilled auto workers that are lacking in some other outsourcing locations, Bachiri said.
“We are predisposed to producing cars for customers in our industry. And the day they decide they need electric vehicles, we will,” he said.
The government funds public-private partnerships, such as the academy run by Renault, to train technicians and managers. Bachiri said that compared to comparable markets, Morocco’s political climate and proximity to Europe make it a sheltered investment.
“It’s like being on a neighboring island,” he said, noting instability in neighboring North and West African countries.
However, as United States and European countries encouraging their carmakers to produce electric vehicles “on land”, it is unclear how Morocco will fare. The country has long prided itself on being an eschewed free market tariffs and trade barriers, but feels squeezed as countries competing for a head start in electric vehicle production introduce policies to protect their domestic auto industries.
Western governments, which have long urged developing countries to embrace free trade, are now implementing policies to enhance their own production of electric vehicles. France and United States both last year passed tax breaks and incentives for consumers buying electric vehicles made in Europe or North America, respectively.
While U.S. incentives may extend to Morocco because the two countries have free trade agreements, Mezzur said they complicate the global supply chain and, at times, complicate its work.
“We live in some up-to-date era of protectionism,” Mezzur said. “We live in an environment of volatile trade rules, which makes things complex for countries like Morocco that have invested heavily in open, free and fair trade.”
