The automotive industry in Morocco is moving towards preparing for the era of electric cars

TANGIER, Morocco – The train traveling from the northern Moroccan countryside to a port on the Mediterranean carries no passengers. Three times a day, it transports hundreds of cars from the Renault factory outside Tangier to ships that transport them to European dealers.

Trade incentives and investment in infrastructure, such as a freight railway, have allowed Morocco to grow its automobile industry from virtually non-existent to the largest in Africa in less than two decades. The North African kingdom supplies Europe with a larger number of cars than it supplies China, India, or Japan, and has the capacity to produce 700,000 cars annually.

Moroccan officials are determined to maintain the country’s role as an auto industry juggernaut by competing for electric vehicle projects. But it remains to be seen whether one of Africa’s few manufacturing success stories can remain competitive as car production around the world shifts to electric vehicles and relies increasingly on automation.

More than 250 companies currently operate in Morocco that manufacture cars or their components, with the automobile industry now representing 22% of the gross domestic product and $14 billion in exports. French carmaker Renault, the country’s largest private sector employer, calls Morocco the “Land of Sandero” because it produces almost all of its Dacia Sanderos small cars there.

Unencumbered by many democratic checks and balances, the government tells companies looking to outsource production to cheaper regions that they can get approval to set up new factories and complete construction in less than five months.

“We have not exported a single car in 15 years. It is now the country’s No. 1 export sector,” Minister of Industry and Trade Riad Mazur said in an interview with The Associated Press.

Mazour said that Morocco has distinguished itself from other foreign destinations by expanding its ports, free trade zones and highways. The government has offered subsidies of up to 35% to manufacturers to set up factories in remote rural areas outside Tangier, where Renault now produces the Clios as well as Dacia Sanderos, the most popular passenger car in Europe, and plans soon to start manufacturing Dacia Joggers hybrid cars.

Chinese, Japanese, American and Korean factories make seats, engines, shock absorbers and wheels at Tangier Automobile City, a large complex of auto parts manufacturers. Stellantis produces Peugeot, Opel and Fiat cars at its factory in Kenitra.

Allocating massive resources to developing and maintaining an automotive sector that can employ a young and growing workforce was part of the 2014 industrialization plan. To create jobs, Mazur said he and his predecessors focused on providing more than cheap labor to foreign automakers looking for new places to build cars. Production of spare parts.

Major automakers pay unionized factory workers in Morocco less than they do in Europe. But even with salaries equivalent to a quarter of France’s monthly minimum wage of 1,766.92 euros ($1,911.97), the jobs pay more than the average income in Morocco. The industry employs 220,000 people, a small but significant portion of the more than 200,000 agricultural jobs the country loses annually amid a six-year drought.

As is the case in many African countries, the domestic market for new cars in Morocco is small. Fewer than 162,000 cars were sold there last year. However, the government’s success in building the automobile industry has made cars the spearhead at a time when Morocco is transforming its largely agricultural economy.

“I have one simple priority – not exports or competitiveness. My mission is to create jobs,” Mazur said.

Abdel Moneim Amachra, a Moroccan supply chain expert, said spending on infrastructure and training of skilled workers puts the industry in a good position to attract investment from automakers looking to build their own electric vehicle supply chains.

Moroccan officials are seeking to attract investments from the East and West, in an attempt to attract industry players from China, Europe and the United States, where they are now racing to produce affordable electric cars on a large scale. China’s BYD – the world’s largest electric vehicle maker – has at least twice announced plans to build factories in the country that were halted before starting.

“The important question is what a small country can do in this world,” Amashra said, noting how quickly the global auto industry is changing. “We have this ability to coexist with Europe, Africa and the United States when a connection between China and the United States cannot be found.”

As Europe works to phase out combustion engines over the next decade, automakers like Renault are preparing to adapt in Morocco. Mohamed Al-Bashiri, director of Renault Group operations in the country, said that the company’s success record in Morocco makes it an attractive destination for others to invest, especially in electric cars.

He said the industry is likely to continue to grow because Morocco’s “integration rate” – the proportion of parts that automakers can source locally – has steadily risen to more than 65%. Bashiri said the country also has a competitive advantage by having experienced and skilled auto workers that some other outsourcing destinations lack.

“We are ready to build cars for customers in our industry. And the day they decide they need electric vehicles, we will do it.”

The government has funded public-private partnerships such as the academy run by Renault to train technicians and managers. Bashiri said that compared to similar markets, Morocco’s political climate and its proximity to Europe make it a safe investment.

“It’s like being on a neighboring island,” he said, noting the instability in neighboring countries across North and West Africa.

However, while the United States and European countries are encouraging their automakers to produce electric vehicles “on the ground,” it is unclear how Morocco will perform. The country has long prided itself on being a free market that avoids tariffs and trade barriers, but finds itself squeezed as countries vying for the advantages of electric vehicle production enact policies to protect their domestic auto industries.

Western governments, which have long pushed developing countries to embrace free trade, are now enacting policies to boost their production of electric cars. France and the United States approved tax breaks and incentives last year for consumers who buy electric cars manufactured in Europe or North America, respectively.

Although US incentives could extend to Morocco because the two countries share a free trade agreement, Mazour said they complicate the global supply chain and make his job more complicated at times.

“We are living in a new era of protectionism,” Mazur said. “We live in a state of instability regarding trade rules that makes it more difficult for countries like Morocco that have invested heavily in open, free and fair trade.”

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