Morocco has transformed its automotive industry from scratch to become Africa’s largest car exporter in less than two decades, thanks to business incentives and investment in railway infrastructure.
The country’s auto industry now produces 700,000 vehicles annually and supplies more cars to Europe than China, India, or Japan.
Morocco’s auto industry accounts for 22% of the country’s GDP and $14 billion in exports. Over 250 car and components manufacturing companies operate in Morocco, including Renault, which exports finished cars from its factory outside Tangiers using daily freight train services.
The government has offered subsidies of up to 35% for manufacturers to set up factories in locations outside of Tangiers. Chinese, Japanese, American, and Korean factories produce car parts at the Tangiers Automotive City, a large campus of car parts manufacturers.
Major automakers pay unionized factory workers less in Morocco than in Europe, but the jobs pay more than the median income in Morocco.
The industry employs 220,000 people, a significant chunk of the agricultural jobs the country is losing annually due to drought.
Despite a small domestic market for new cars, the government’s success in building an automotive industry has made cars a priority as Morocco works to transform its largely agrarian economy.
The industry is likely to continue growing, with a focus on electric vehicles, as Europe works to phase out combustion engines over the next decade.
The Moroccan government is seeking investment from both East and West to lure investors from China, Europe, and the United States as they race to produce affordable electric vehicles at scale. With its political climate and proximity to Europe, Morocco is an attractive destination for investors, particularly in EVs.