Morocco's name has become more prominent on the global map of automobile production, thanks to the stimulating investment environment it enjoys and a supportive geographical location that has enabled it to move from "zero exports" 15 years ago to 700,000 cars annually. Revenues exceed USD14 billion in 2023.

However, a recent report highlights two other countries in North Africa, Egypt and Algeria. Today, both countries are similar in their production structure to Morocco in that they possess the necessary manufacturing capabilities similar to that country.

Industry in Morocco and Egypt

Despite the similarities that Egypt and Morocco share in the structure of industry and the investment environment, the difference in export capabilities today is far from comparable. Egypt's car exports last year amounted to 1,595 cars, worth USD91.9 million, up from USD47.2 million in 2022, according to data from the Central Agency for Public Mobilization and Statistics (CAPMAS) in Egypt. However, revenues from car manufacturing in Morocco exceed USD14 billion, according to estimates by the Moroccan Ministry of Industry. About 700,000 cars are exported annually from Morocco to Europe and the rest of the world, according to estimates by the Moroccan Ministry of Economy.

A recent report by Fitch Solutions on the automotive industry in the Middle East and North Africa (MENA) indicates that the special incentives provided to automobile production companies outweigh the risks of production in the region due to the improvement of the political and economic environments. This is why Morocco appears to be a very attractive market for investors despite the high geopolitical risks in the region. This is thanks to the country's location and access to the markets of the US and the EU, as well as the continuous development of the production environment, thereby enhancing the attractiveness of the Moroccan market for investors in the long term.

Algeria is in third place

According to the report, the MENA region was able to score 60.6 points on the Automotive Production Risk and Reward Index. This is a sub-index of the Fitch Solutions Production Index that measures the industry's performance and qualifications. However, the region lagged behind the global average of 65 points, while Morocco maintains the lead position on the index with 57.6 points, followed by Egypt with 63 points, then Algeria with 63.2 points.

1.4 million cars annually

According to recent statements by the Moroccan Minister of Industry and Trade, Riad Mazour, his country plans to produce 1.4 million cars annually during the next four years, from "zero exports" 15 years ago. This makes the automotive sector the first among the exporting sectors in 2023, at about 140 billion Moroccan dirhams (USD14.06 billion). Mazour said that Morocco received new investments in 2025 to push production capacity to one million cars annually.

Najib Aksabji, a Moroccan economist, also points out that his country achieved a boom in car exports after the Renault factory in Tangier began its activity. This activity was later strengthened at the Peugeot factory in Kenitra, moving the share of automobile exports from 13 percent in 2011 to 27.5 percent of the country's total exports.

The first trading partner of Morocco

He also says that the EU alone represents more than 60 percent of Morocco's trade. This percentage rises to approximately 76 percent, once European countries that are not members of the EU are taken into account. Aksabji added that France and Spain account for the lion's share of Moroccan exports, while the latter has been Morocco's main trading partner since 2015.

According to the website of the Moroccan Ministry of Industry, the government has developed eight industrial systems for car production, including electrical wires, seats, metal structures, batteries, and engines, while exempting producers from paying some taxes during the first five years of entering the market.

The Moroccan experience

Gamal Askar, an Egyptian specialist in the automobile industry, says that the Egyptian market is still weak, given the average sales of the past seven years. The country produces only 150,000 to 160,000 cars, in a country with a total population of 110 million people.

Askar talks about the Moroccan experience, saying that Rabat, Morocco's capital, is now ranked fifth in the world in terms of exporting cars to Europe, and has made parallel progress in manufacturing aircraft and electronic chips. The investment environment aims to attract giant companies for production and export.

In terms of production drivers and manufacturing structure, Algeria's name also stands out in the Fitch Solutions index. Algeria has an abundance of the equipment needed for the automobile industry and is open to West Africa and the establishment of a free zone with Mauritania. It also has roads to Senegal. Algeria aims to increase the local production of auto parts to 35 percent by 2026.

Photo: Tangier Automotive City (TAC) (by Adobe)

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