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The new 100% made-in-Morocco vehicle “Neo” is a testament to the kingdom’s commitment to ensure this momentum continues.
Through its exponential growth over the years, Morocco has succeeded in recent years to build a solid reputation in the automotive industry as a leading exporter to the African market. As such, the automotive sector has become Morocco’s largest export, ahead of the mining sector, accounting for 29% of the country’s total exports.
The kingdom now has over 183 industrial units distributed between Tangier (43%), Casablanca (39%) and Kenitra (7%). The country has provided high-quality infrastructure and two industrial platforms have been granted free zone status for vehicle manufacturing, namely the Cite de l’Automobile in Tangier and the Cite de l’Automobile in Kenitra.
To address market human resource needs, the kingdom has implemented an innovative training strategy by creating three training institutes for the automotive industry (IFMIA).
Background on Automotive Industry
The first attempts to develop the local industry date back to the late 1950s; however, the diversity of brands assembled and the low rate of motorization did not lead to the effective development of the industry.
In this sense, in the early 1980s, the government introduced tax and customs laws to boost the domestic market. Then in the 90s, Morocco began a process of economic liberalization, including permitting vehicle imports. In addition, the launch of the country’s industrial acceleration plan (2014-2020) allowed the country to begin the development phase of automotive ecosystems.
Economist and Director of the Government Work Observatory Mohammed Jadri told Morocco World News (MWN) that the automotive sector is becoming the largest industrial exporter with revenues that reached more than 80 billion dirhams in 2021. The industry employs more than 160,000 people in 251 production units in Tangier, Meknes, Kenitra, Rabat, and other places around the country.
The economist added that the automotive industry is a real success story that has been steadily expanding since 2000.
“Morocco has put in place many measures to attract foreign investors, such as investment in infrastructure, human capital training, and tax benefits,” said the same spokesman.
Morocco has decreed a total exemption from corporate tax for companies operating in free zones for five years, followed by a cap of 8.75% for the next 20 years. Additionally, the government has exempted import duties for capital goods, materials, and tools necessary to realize an investment project costing more than 200 million dirhams.
Despite the pandemic crisis and the recent conflict in Ukraine, Morocco’s automotive industry has produced more than 700,000 cars, generating over 180,000 jobs. Thus, the country has realized 72.2 billion dirhams through profits and the export of its products to over 74 countries.
“Morocco produces more than 700,000 vehicles annually, with a value-added exceeding 60%”, Jadri told MWN.
For the economist, the challenge for the next few years is to produce one million vehicles with an integration rate of 80% of Moroccan value added by 2025. “Morocco is very proud to occupy the third place in the world in terms of competitiveness after China and India,” he added.
Morocco ranks second in terms of improving industrialization in Africa according to a recent report entitled “African Industrialization Index 2022” (AII 2022) published by the African Development Bank (AfDB), the African Union (AU), and the United Nations Industrial Development Organization (UNIDO) uncovered that.
According to the report, Morocco is one of the strongest manufacturing economies in Africa, registering a constant evolution in all components of the index since 2010. The report states that “the government has prioritized industrial development, particularly in the automotive sector.
