Morocco Automotive Industry Outlook - Growth, Trends, COVID-19 Impact, and Forecast (2022 - 2027)

Morocco Automotive Industry Outlook - Growth, Trends, COVID-19 Impact, and Forecast (2022 - 2027)

The Moroccan automotive market studied was valued at USD 8 billion in 2020, and it is expected to reach a value of USD 22 billion by 2026, registering a CAGR of over 15% during the forecast period.

Due to the spread of COVID-19, the automotive market in Morocco witnessed a slump in growth due to lower footfalls in the showrooms. Various automobile manufacturers were forced to temporarily shut their production, as the supply chain was disrupted by the country-wide lockdown imposed by the government, which restrained the growth of the market.

The increasing investment from the leading automakers in Africa and incentives offered by the government by removing certain taxes during the first five years are majorly driving the automotive market in Morocco. Foreign investment is encouraged by the Moroccan government. The 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.

Additionally, Morocco’s integration into the global economy was facilitated by the signing of numerous automotive free trade agreements with the European Union and the United States. Morocco signed a deal with more than 25 automotive industry projects worth USD 1.5 billion, as it seeks to position itself as an international hub for automotive production. These trade agreements contributed positively to the emergence of automotive export activities in the country.

Key Market TrendsForeign Investments from Leading Auto Manufacturers

Foreign direct investment is continually increasing, as companies are attracted to the country’s favorable economic conditions, government support through various initiatives (such as tax exemptions for the first five years, VAT exemptions, and land purchase subsidies), skilled workforce, and modern infrastructure.

The financial and training support provided by the national government is encouraging manufacturers and local candidates to join the industry and contribute to country's economy.

• Some of the recent investments in Morocco’s automotive sector include PSA Peugeot Citroen’s investment of USD 615 million for setting up its manufacturing facility, which is expected to be operational in 2019.
• The company aims to manufacture 90,000 B-and C-segment passenger vehicles in a year and internal combustion engines (ICE) for passenger cars for both the domestic and regional markets.
• Despite a low population and a few sales of vehicles within the country, automobile manufacturers in Morocco made noteworthy exports to Europe and Middle-East and Africa.
• Additionally, Morocco’s integration into the global economy was facilitated by the signing of numerous free trade agreements with the European Union and the United States. These trade agreements contributed positively to the emergence of export activities in the country.
• From 2019 to 2020, Renault-Nissan alliance produced close to 588,400 vehicles in the span of two years, with the total production in two years reaching 676,000, approximatey.

Increasing Demand for Passenger Vehicles

Although the industry was thriving before, the pandemic forced the sales numbers to take a dip of almost 20%, comparing 2019 with 2020. With virtually no movement, a stranded economy, and the low availability of cash, the passenger car sales took a dip from 148,354 in 2019 to 117,046 in 2020, owing to the pandemic.

During the Q1 of 2019, Dacia stood as the market leader, with a 30.3% market share. The Renault group, in April 2019, sold about 5,364 units of passenger cars and utility vehicles, out of which, Dacia alone contributed to 3,157 units.

Morocco developed an investment cluster program, which saw Renault enter the local market. Renault was the only global automaker assembling vehicles in the country until the arrival of Peugeot in 2019.

Luxury car manufacturers witnessed an increase in their sales. Mercedes-Benz sold 3,105 units, and it stood as the market leader in the luxury segment, followed by BMW with 2,700 units and Audi with 2.572 units.

Commerciaal vehicle sales in the Moroccan automotive industry is expected to increase in the coming years, owing to the strategically beneficial geographical location of the country. The trade time to Spain from Morocco is one to two days to all the other European countries. This makes Morocco central to Africa's trade relations with Europe. With Morocco closing important trade relation deals with the United States, the European Union, and many Asian countries, and majority of the deals with respect to automotive industry, the country is expected to stabilize the market in the post-pandemic scenario.

Competitive Landscape

The Moroccan automotive industry is consolidated. Some of the key players in this market are Renault, Nissan, Peugeot, Volkswagen, and Dacia. The country attracted several investments from international automotive firms, such as Renault, Peugeot, and the Volkswagen group. The country has seen 91 million vehicle sales in 2019.

Renault/Dacia owns a market share of over one-third of the new vehicle sales, and it is the largest automotive entity in Morocco. The company has two production plants in the country, and sources about 42% of its parts from local suppliers.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

Companies Mentioned

Renault
Nissan
Ford Motor Company
Peugeot
Hyundai Motor Company
Fiat SpA
Dacia
Volkswagen AG
Mercedes
Benz
BMW
Audi

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