Morocco: the automotive industry goes green

Morocco: the automotive industry goes green

Thousands of brand new vehicles wait in the large parking lot of French car manufacturer Renault, on the outskirts of Tangier, to be transported to the port of Tangier Med towards Europe.

They testify to the success of the automotive sector in Morocco, which breaks production and export records every year.

“It is the most competitive platform for building automobiles, the most carbon-free in the world. This is what makes Morocco attractive and this is what has allowed the Moroccan platform to grow so quickly and reach a capacity of one million vehicles per year by 2025. Morocco therefore built it in fifteen years from scratch. We were not exporting cars fifteen years ago,” explains Ryad Mezour, Moroccan Minister of Transport. commerce and industry.

More than 250 companies that manufacture cars or their components are present in Morocco. The French car manufacturer Renault, the country's largest private employer, calls Morocco "Sandero-land" because it produces almost all of its Dacia Sandero, subcompact cars, there.

Moroccan authorities are determined to maintain the country's role as an auto manufacturing giant by competing for electric vehicle projects.

They tout their development strategy behind an industry that today represents 22% of gross domestic product and $14 billion in exports.

Freed from the checks and balances of democracy, the government tells companies seeking to relocate production to cheaper regions that they can obtain permission to build new factories and complete the work in just five months.

According to Mr. Mezzour, 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 company's vehicle. most popular tourism vehicle in Europe, and will soon start manufacturing Dacia Jogger hybrids.

Chinese, Japanese, American and Korean factories make seats, engines, shock absorbers and wheels at Tangier's Cité de l'automobile, a sprawling campus of auto parts makers. Stellantis produces Peugeot, Opel and Fiats at its Kenitra factory.

As Europe works to phase out combustion engines over the next decade, automakers like Renault are preparing to adapt in Morocco.

Mohamed Bachiri, Renault Group's operations director in Morocco, explains that the company's success in Morocco makes it an attractive destination for other investors, particularly in the EV space.

“Morocco has become a strategic pillar in the group's industrial strategy at the international level. We have an annual production capacity of 440,000 vehicles which will reach 500,000 by 2025. This will allow the cars we build in Morocco, 'Made in Morocco', to be exported to more than seventy countries than those to which we currently export," explains Mr. Bachiri.

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 ensure Morocco continues to create jobs, Mezzour says he and his predecessors have focused on ensuring the country offers more than cheap labor to foreign automakers at home. looking for new places to build cars and produce parts.

"I have only one priority that makes things simple, and that is to create jobs. And to create jobs, I have to make those who create jobs happy, so that they create their first jobs and repeat their intention so I have to make them happy, make them competitive and open the market to them,” he said.

Large car manufacturers pay their workers less in Morocco than in Europe.

But even with salaries equivalent to a quarter of the French minimum wage, the jobs are better paid than the median income in Morocco.

The industry employs 220,000 people, which is only a small part of the 200,000 agricultural jobs the country loses each year due to a six-year drought.

Moroccan authorities have sought to attract investment from the East and West, trying to attract industrial players from China, Europe and the United States in their race to produce affordable electric vehicles at large scale. ladder.

Chinese company BYD - the world's largest electric vehicle maker - has announced plans to build factories in the country at least twice, which were halted before they even got underway.

Li Changlin, Chinese ambassador to Morocco, says the country is an attractive partner in the automotive industry.

"For the Chinese, Morocco has certain advantages over other countries. Not only is it well located geographically, but it has a stable economic, social and political environment and a skilled and competitive workforce. inexpensive. In addition, the country adopted a new investment charter last year. All these conditions have favored significant investments by Chinese companies in Morocco.

However, as the United States and European countries encourage their automakers to “offshore” electric vehicle production, it is unclear how Morocco will fare.

The country has long prided itself on being a free market that avoids tariffs and trade barriers, but finds itself stuck as countries vying for the benefits of electric vehicle production adopt policies aimed at protecting their national automobile industries.

Western governments, which have long pushed developing countries to embrace free trade, are now adopting policies to boost their own EV production.

Last year, France and the United States both passed tax credits and incentives for consumers who purchase electric vehicles made in Europe or the United States, respectively.

Although U.S. incentives may extend to Morocco because of the free trade agreement between the two countries, Mezzour says these measures complicate the global supply chain and have sometimes complicated his job.

“We live in instability in terms of trade rules which makes things more difficult for countries like Morocco which have invested heavily in open, free and fair trade.

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