Morocco’s automotive sector set to make up for coronavirus losses

The outbreak of the coronavirus has crippled the global supply chain for the automotive sector which, coupled with a demand crisis, has triggered a lethargy in the car industry fabric globally with Morocco being no exception.

Morocco has made the automotive sector a pillar of its industrial strategy attracting large-scale investments by world giants such as Renault and PSA.

The disruptions incurred by the coronavirus have however hit Morocco’s car manufacturing causing a drop in exports by 33 in the first six months this year.

The drop is mainly due to the closure of many factories during the lockdown period and the feeble demand in Europe.

Nevertheless, cars and car parts are still top Morocco’s industrial exports by 28 billion dirhams ($3bln) ahead of phosphates and fertilizers with 24 billion dirhams.

Certainly, the coronavirus has negatively impacted the Moroccan automotive industry but it also offered opportunities for strengthening the country’s competitiveness.

Morocco strives to improve its competitiveness in order to outperform India and China as the most attractive hub for automotive investments, Industry Minister Moulay Hafid El Alamy said.

Building on its investments in low-carbon economy and renewable energy, Morocco is poised to narrow the competitiveness gap with both China and India, according to the minister.

The coronavirus pandemic has pushed many manufacturers to reduce dependence on China to avert disruption of supply and cut costs.

Jobs created in the automotive sector reached 116,000 by mid-2019, while the part of locally produced parts in Renault and PSA cars stand at an average of 50%. The goal was bringing that rate to 65% in 2020.