Morocco Emerges as Key Automotive Manufacturing Hub for Global Carmakers

Several French manufacturers have set their sights on Morocco in recent years. Since 2012, Renault has had a large factory spanning 300 hectares in Tangier where it produces several vehicles, including the Dacia Sandero, the best-selling car in Europe. In total, 312,000 vehicles were assembled last year. It is the largest factory of the French group in the world (7,000 employees), entirely dedicated to its low-cost brand Dacia.

Stellantis has also established itself in Morocco. In 2019, the Franco-Italian-American manufacturer inaugurated its factory in Kenitra. Last year, 175,000 vehicles, including Peugeot 208s for the Old Continent, but also electric microcars like the Citroën Ami, were produced there. And the Franco-Italian-American group wants to go far: it plans to invest 300 million euros to increase its capacity to 400,000 vehicles per year by 2027.

The Chinese company Sentury Tyres has also bet on Morocco. It produces its tires there.

Why this attraction to Morocco? According to the Olivier Wyman consultancy, the appeal of the destination is explained by the attractiveness of labor costs, which represent 65% of the total cost of a car, reports L’Est républicain. Its ranking of labor costs by country illustrates this perfectly. At $106, Morocco tops this ranking, far ahead of China ($597), the leader in the automotive market, Romania ($273), Mexico ($305), Turkey ($414), Spain ($955), Canada ($968), the United States ($1,341), France ($1,569) and Italy ($2,067).

French manufacturers are also attracted by hourly labor costs of 5 to 6 euros, while in France, these same costs exceed 45 euros. This allows Renault to offer the Dacia Sandero 3, one of the cheapest cars on the market with an entry-level price of 12,990 euros (65 hp engine).