Denver – Morocco’s automotive industry is poised to grow by approximately $14 billion within the next five years. Research from advisory firm Mordor Intelligence indicates that both foreign investment and government incentives are causing a positive growth trend in Morocco’s auto industry.
According to the report, “automotive sector exports went from MAD 14.7 billion to almost MAD 65.1 billion at the end of 2018, which is an increase of 14.5% per year” for the industry. It also forecasted a predicted Compound Annual Growth Rate (CAGR) of over 15% by 2026.
Despite a temporary slowdown as a result of the pandemic, Morocco has signed 25 separate trade agreements with various auto manufacturers across both the EU and US. These global contracts will play a role in helping Morocco transition into “an international hub” of auto manufacturing in the future. Experts predict this will result in the auto industry being worth about $22 billion dollars within the next five years.
Currently, manufacturers in the North African country are experiencing an increasing demand for passenger vehicles. Long time auto manufacturers Dacia and Renault, which have been operating in Morocco for years, were recently joined by Peugeot, which officially entered the Moroccan auto manufacturing scene in 2019. In addition, Chinese manufacturer BYD and German manufacturer Volkswagen are also rumored to be considering Morocco as a location for manufacturing.
Another sector that has seen significant growth is luxury automobile manufacturing. The top three producers in the country, Mercedes-Benz, BMW, and Audi, all experienced increased sales.
Morocco’s auto industry has been undergoing steady growth, and experts predict the country will have the capacity to produce a million cars by 2030. Morocco was recently labelled as Africa’s leading auto manufacturing hub, ahead of the auto industries of both South Africa and Egypt. The country is also expected to soon outpace Italy in vehicle production. The Oxford Business Group estimated that the auto industry accounted for about 19% of the Moroccan GDP in 2019, and the group predicts this percentage will increase to about 24% by 2022.
A large component of Moroccan-produced vehicles are marked for export to various countries in the EU. Given the geographical proximity of Morocco to both European and African consumers, analysts only expect for this trend to continue as the Moroccan car industry prepares for monumental growth to meet increasing demand in both the domestic and international market over the next five years.
