Interview: Mohammed Amal Guedira
What factors make Morocco’s automotive industry attractive to foreign investors?
MOHAMMED AMAL GUEDIRA: Morocco benefits from political and macroeconomic stability, and has seen stable growth, controlled inflation and low debt. The country also has a strategic geographic position, at the junction of Europe, Africa and the Arab World. In addition, the country offers access to more than 1bn consumers through the free trade agreements that are in progress. Its advanced road, port, air and telecoms infrastructure make Morocco a multi-connected nation, where the movement of people and goods is very fast.
Regarding the attractiveness for foreign companies to invest in the automotive sector, there are many competitive advantages and incentives, such as our free zones and industrial acceleration zones, which offer attractive taxation rates for investors. Qualified human resources are also available, with institutes for vocational training and hiring within the automotive industry. Upskilling human resources has been identified as a strategic goal to increase the investment attractiveness of Morocco. Training institutes have been established to meet the private sector’s needs and to strengthen companies’ productivity and competitiveness.
Morocco also has a diversified real estate offer within integrated industrial platforms, with attractive financing rates as well as government subsidies for investors who come and create jobs in the automotive industry and improve the local integration rate.
How can the development of small and medium-sized enterprises (SMEs) within the automotive ecosystem be encouraged?
GUEDIRA: The automotive industry in Morocco is based on the presence of two large manufacturers, Renault and PSA. These two companies are committed to investing in production sites and achieving high local integration rates. Around 250 tier-1 and tier-2 equipment manufacturers have settled around these firms in recent years to both supply them and export around the world, taking advantage of free trade agreements. Morocco has created an automotive ecosystem that can achieve our goals, namely job creation, increasing the local integration rate and increasing the industrial sector’s contribution to GDP.
The sustainability of these ecosystems depends on developing the sector’s subcontractors, particularly SMEs, which can increase local manufacturing. The types of support that have enabled these equipment manufacturers to grow are now being accessed by all of the sector’s SMEs, which will reduce the risks that could impact Morocco’s automotive industry, in particular competition from other emerging countries.
In what ways can Morocco anticipate the evolution of the automotive sector?
GUEDIRA: The automotive sector is facing three major disruptions that will revolutionise the entire ecosystem: autonomous vehicles, electric vehicles and car sharing. The automotive industry is going to fundamentally change its DNA, and industry leaders are showing agility and adaptability so as not to fall behind. A large proportion of the vehicles produced in the future will likely be powered only by batteries. While today’s cars are made up of around 30,000 parts, electric cars only need 10,000. Parts manufacturers must take this into account and prepare themselves. They must also produce lighter, cleaner and safer vehicles, meaning new materials may come into play in vehicle production.
Consequently, the automotive world is experiencing a major revolution, and research and development (R&D) centres are working tirelessly to produce the car of the future today. We can see that in Morocco as well, with several automotive R&D centres collaborating with universities and industrial stakeholders. This close collaboration is necessary to allow all players based in Morocco to be ahead of the curve in terms of new technologies and adapt their production accordingly.
Read More from OBG
