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Rabat – Japanese Car-parts suppliers including Yazaki and Fujikura plan to boost their operations in Morocco due to the Russia-Ukraine conflict, reported the daily Nikkei financial newspaper on Thursday.
According to Nikkei, Yazaki will inject MAD 688 million ($68.7 million) in order to increase the production of its Moroccan factories by 25%.
Out of the total investment, MAD 381 million ($38 million) will be used to build a new production facility in Meknes.
Yazaki will begin construction on the Meknes facility in 2022. In addition, capacity will be increased at the company’s existing factories in Tangier and Kenitra.
Yazaki is a global car parts supplier that mainly produces cable harnesses, instruments, connectors, and terminals. Yazaki is headquartered in Tokyo, Japan.
According to Yazaki Group’s website, 90% of the company’s employees operate outside of Japan.
Other Japanese automotive suppliers are following suit. After shifting operations from Ukraine, Fujikura is set to begin production in Morocco. Sumitomo Electric Industries is increasing its output in Morocco this year as it transitions away from Ukraine, reported Nikkei.
The Russia-Ukraine conflict severely disrupted the automotive value chain by limiting car parts from Ukraine. This has prompted several automotive suppliers to defer or discontinue trade with Russia, and to pull out of Ukraine.
Irish automotive company Aptiv reported on April 3, that it will end its operations in Ukraine and might shift its production to Morocco or other countries in Eastern Europe.
Read also: Aptiv Automotive Looks to Morocco to Shift Ukraine Production
Morocco’s automotive industry
The automotive industry is one of Morocco’s economic pillars. Moroccan Minister of Industry said on April 2019, that the automotive industry created the most jobs in Morocco.
According to Morocco’s High Commission of Planning, Morocco’s automotive industry created over 200,000 jobs and sold over 160,000 units in 2021.
According to the Ministry of Industry and Trade, the total value of final goods and services exported outside of Morocco in 2021 was MAD 83.8 billion ($8.56 billion).
Morocco’s automotive industry is the country’s largest exporter. In 2018, Morocco became the African continent’s first automotive manufacturer, earning $7 billion (MAD 65.1 billion) in exports, surpassing South Africa.
