Stellantis CEO: Morocco Poses Competition for Spanish Automotive Factories

Doha – In a recent meeting with media at the Paris Motor Show 2024, Carlos Tavares, CEO of Stellantis, praised the work of Spanish automotive factories while cautioning about the growing competition from Morocco for the company’s facilities in Vigo, Zaragoza, Madrid, and Mangualde, Portugal.

“The future of the factories in Spain until now is quite bright, because they have been working very hard to improve quality and reduce costs. So they are among the best that we have in the European Union, the best, and for Vigo, Madrid, and Zaragoza, there are good plans,” Tavares stated.

However, he emphasized that the real competition for the Iberian Peninsula factories lies to the south. “The competition is Morocco, today; maybe very soon Algeria, Tunisia, and Egypt, that’s where the competition is, and of course, Turkey. So instead of looking north, in Spain and Portugal, you have to look south, and that’s where the competition is,” Tavares added.

In July, Stellantis announced the acquisition of Sopriam, a subsidiary of the Al Mada group, as part of its efforts to strengthen its activities in Morocco. The company aims to double its production capacity at the Kenitra factory to 400,000 vehicles by 2027, with a target of becoming the market leader with over 22% market share by 2030.

Morocco has recently surpassed China to become the European Union’s top automotive trading partner, with exports valued at €15.1 billion in 2023, compared to China’s €13.6 billion. This growth is largely driven by the country’s focus on higher-value production and strategic investments in its automotive sector, particularly in the industrial hubs of Tangier and Kenitra.

The Moroccan government has set ambitious goals to further expand its automotive production, aiming to manufacture one million vehicles annually by 2025, up from its current capacity of 700,000. Between 2020 and 2023, Morocco’s automotive output increased by 63%, solidifying its position as Africa’s leading car producer after South Africa.

Previously, Spain has expressed concerns about Morocco’s potential to “steal away” the manufacturing of thousands of electric vehicles. Morocco’s unique mix of strategic location, cheap labor, raw materials, and renewable energy positions it to become an electric vehicle manufacturing powerhouse.

European automaker giants, such as Renault and Stellantis, have already established factories in Morocco, attracted by the country’s competitive labor costs, skilled workforce, and proximity to Europe. Additionally, five Chinese battery manufacturers have recently confirmed plans to set up battery plants in the country to produce batteries for electric cars and accessories.