French Automakers Drive Growth in Morocco's Thriving Auto Industry

Morocco's automotive industry has experienced significant growth in recent decades, marked by impressive achievements in exports and job creation. Over the past ten years, double-digit average growth in both these key indicators has propelled the sector to an annual revenue exceeding 85 billion dirhams, making it the top exporter in the Kingdom, with a remarkable 64% local integration. Moreover, it has emerged as the leading automotive hub on the African continent.

The Catalyst: Renault's Tangier Factory
The catalyst for this unprecedented dynamism can be traced back to the inauguration of Renault's factory in Tangier in 2012. This move has led to a substantial increase in domestic production capacity, reaching approximately 700,000 vehicles annually. Another influential player is Stellantis, formed from the merger of Fiat Chrysler Automobiles and PSA Group, with Peugeot - now under the Stellantis umbrella - establishing a factory in Morocco in 2019. The Kenitra plant, a nearly $600 million investment, boasts a production capability of 200,000 vehicles. In November, Stellantis announced an additional $300 million investment to double output, specifically for the Peugeot 208.

Beyond Assembly: Automotive Supply Chains
The impact of the automotive sector in Morocco extends beyond assembly and manufacturing. It has stimulated thriving automotive supply chains rooted in the operations of Renault and Stellantis. The arrival of these major French automakers triggered a wave of investments from automotive suppliers worldwide, including those from Europe, North America, Japan, and China. Investments have continued to thrive, creating a beneficial cycle across tier 1, 2, and 3 suppliers since the inception of the Tangier and Kenitra plants.

Global Attention: Spanish Automakers Join the Fray
While Renault and Stellantis have attracted most equipment providers, Spain's automakers have also recognized Morocco's potential as a top-24 global vehicle producer with advantageous trade agreements. Spanish companies now operate to supply not only the French groups but also their own major clients like Renault and Stellantis. Ficosa, Gestamp, Teknia, and Antolín are among the growing number of Spanish suppliers in Morocco, with 20 Spanish automotive firms currently having a presence, according to the Spanish Institute of Foreign Trade.

Strategic Appeal: Morocco's Unique Advantages
Morocco's strategic location adjacent to Spain, competitive labor costs, skilled workforce, and favorable trade deals have positioned it as an appealing destination for investments across the Spanish automotive value chain. Currently, the Kingdom is home to over 250 automotive equipment manufacturers, including numerous subsidiaries of multinational corporations. With the leadership of French giants Renault and Stellantis, Morocco's auto sector appears poised for sustained strength.