Made in Morocco: fleets and fleet suppliers in Africa – and Europe – are increasingly relying on the North African kingdom, which will this year will overtake South Africa as the continent’s main automotive manufacturer, to meet their mobility needs.
Which country is the biggest vehicle manufacturer in Africa? For decades on end, that question had one and the same predictable answer: South Africa, long the continent’s biggest economy.
Largest economy
But that’s all over now. In the mid-2010s, Nigeria overtook South Africa as the largest economy in Africa. And now, Morocco has snatched away the title of Africa’s major vehicle manufacturer.
In 2023, Morocco produced 582,000 cars and LCVs. This year, Fitch Solutions predicts, that figure will rise to just under 614,000 units. Meanwhile, South Africa’s light-vehicle production will decrease to 591,000 units.
The switchover is as much due to what’s going wrong in South Africa as to what’s going right in Morocco.
Catalytic converters
The decline of South Africa’s automotive industry is the result of several factors: worsening industrial logistics, high vehicle taxes stifling local demand, and risky concentrations of automotive exports.
For example, South Africa generates about 70% of its automotive export value from exports to Europe. However, 40% of South Africa’s automotive export consists of catalytic converters, the demand for which is declining, because of the increasing transition to BEVs – especially in Europe.
Morocco’s rise builds on a long-standing strategy of incentivizing investments in the automotive supply chain, resulting among other thing in factories opened in the country by Renault-Dacia and Stellantis.
Dacia Jogger
Morocco has especially been keen to develop industries supplying the EV value chain, anticipating growing demand from nearby Europe. Just three weeks ago at the Renault plant in Tangier, Dacia launched production of the Jogger, the first hybrid vehicle manufactured in Morocco.
And in 2026, Chinese-German battery maker Gotion will open a Gigafactory in Morocco worth €1.2 billion that is capable of manufacturing 20 GWh in battery capacity per year.
In the long run it may not be Europe’s manufacturing footprint that determines Morocco’s automotive future, but China’s. Of recent, Chinese investments in EV and battery manufacture in Morocco have “exploded”, in the words of the Chinese ambassador to the country.
Free trade agreements
Why? Morocco has free trade agreements with China, the U.S., and the EU, opening up the possibility of Chinese manufacturers establishing factories in Morocco to bypass tariffs and other trade barriers imposed by the EU and the U.S. on vehicle imports directly from China.
Hundreds of Chinese companies are setting up shop in the Mohammed VI City for Science and Technology, a new hub for technology and manufacturing in the northern port city of Tangier.
Many of those companies focus on the EV and EV battery supply chain, and they are pouring billions of euros into establishing plants in Morocco.
At the moment, automotive accounts for around 20% of Moroccan GDP. That is likely to only increase in the future. According to Fitch Solutions, the Moroccan vehicle manufacturing industry will continue to grow at an average annual rate of 6.8% for the next decade, reaching an annual volume of just under 1.1 million units by 2033.
Reducing incentives
As Morocco’s automotive muscle increases, so does the country’s relevance not just to Africa, but also to the European Union and the United States. While much of that extra muscle may be Chinese in origin, the question remains: How much?
The U.S. is already pressuring Mexico to reduce incentives for Chinese companies to manufacture there. It is not inconceivable that the EU will develop a similar policy vis-à-vis Chinese automotive investment in Morocco.
Whatever happens, it looks like the future of automotive manufacturing for markets in Africa, Europe and North America will be… made in Morocco.
