Morocco’s Auto Industry Proposes Measures to Revive Sector Amid COVID-19 Slump

Decisions have been made by the CGEM to relaunch the sector, reports Les Inspirations Eco. The initial work of the two associations first made it possible to better assess the impact of covid-19 on turnover and employment in this sector. A survey conducted by the CGEM found a 50% drop in turnover and nearly 60% in employment. The slowdown is mainly due to industrial activity being stopped or slowed down and a plunge in demand for new cars (-86% in April according to AIVAM figures).

Among the measures proposed by the CGEM and formulated in the recovery plan to stimulate supply and demand, we can mention a scrapping premium of 30,000 dirhams, intended for the renewal of private cars and light commercial vehicles over 30 years old, or a fleet of around 500,000 vehicles. To this is added an ecological bonus of up to 30,000 dirhams, with a reduced VAT of 10% and an exemption from registration fees for buyers of low-polluting hybrid, electric or even low-CO2 thermal vehicles.

For the Association of Vehicle Importers in Morocco (AIVAM), the sector should urgently experiment with the digitalization and simplification of the process of transfer and resale of used vehicles (VO). According to the same media, this innovation should allow dealers to develop the VO activity and help to structure it even more since, each year, some 540,000 transactions escape any taxation. The AIVAM does not fail to insist as a priority on the survival of existing companies through an immediate and unconditional release of the Damane Oxygène device, a prerequisite for any recovery process. In addition, to support the automotive industry, local integration (of spare parts) and exports, the CGEM proposes, among other measures, to "prohibit and structure the imports of spare parts produced locally and to strengthen normative control in the laboratory".

Also, it has been requested to "stop the import of used vehicles or the overtaxation (50% instead of 25%" and to make the same recommendation for the import of used spare parts. Another strong measure is to exempt CNSS contributions and income tax from June to December 2020 to maintain employment (80%) and contracts affected in Morocco to support a sector that was still thriving a few months ago and is now paralyzed by covid-19.