Gearing up: the importance of Morocco’s automotive and aerospace sectors

In recent years, Morocco has established itself as a leading manufacturing hub in Africa, particularly in the automotive and aerospace sectors. Thanks to its strategic location, government incentives, and extensive vocational training programs, the kingdom is increasingly viewed as a viable alternative to Eastern Europe and Asia for industrial production. However, trade barriers and domestic taxation could threaten continued growth.

Morocco’s automotive industry has grown rapidly, now the largest car producer in Africa, with exports reaching $14 billion in 2023, a 30% increase from 2020. With Renault and Stellantis operating assembly plants, the country produced over 400,000 vehicles in 2023, a number expected to rise with additional investments in electric vehicle (EV) production, including battery assembly and component manufacturing. Government-backed industrial zones, including those in Tangier and Kenitra, have attracted hundreds of suppliers, creating a strong supply chain for local production and exports.

The appeal of Morocco lies in its proximity to Europe, competitive labor costs, and preferential trade agreements, particularly with the European Union, which remains the largest market for Moroccan-made vehicles, accounting for over 85% of exports. Yet, potential EU tariffs and rising global protectionism, such as carbon border taxes, could slow growth. Domestically, high corporate taxes and indirect levies threaten Morocco’s cost advantages.

Alongside automotive growth, Morocco’s aerospace sector has expanded rapidly, with exports reaching $2 billion in 2023, growing over 15% annually in the last five years. The country now hosts more than 140 aerospace firms, including key suppliers to Airbus and Boeing. Safran and Spirit AeroSystems operate in Morocco’s aerospace clusters in Casablanca and Nouaceur. The government has played a pivotal role, investing heavily in training programs to ensure a pipeline of skilled engineers and technicians.

With increasing global demand for aircraft parts and maintenance services, Morocco has an opportunity to expand its aerospace exports, particularly to France, Spain, and the United States, which are among its top buyers. However, supply chain disruptions and geopolitical tensions threaten key client orders. Rising energy costs and limited R&D investment could weaken competitiveness, highlighting the need for increased public and private funding in innovation.

Morocco must balance business incentives with fiscal discipline to sustain growth. Tax incentives, infrastructure investment, and trade diplomacy will be key to continued expansion. Strengthening partnerships with European and North American markets, while diversifying exports beyond traditional partners, will help mitigate external risks.

As Morocco continues to evolve into a global manufacturing hub, its ability to navigate economic and geopolitical headwinds will determine the sustainability of its growth. With policy reforms and investment, Morocco can cement its status as one of Africa’s leading industrial economies.

*Lonzo Cook is a journalist and writer. He spent two decades at CNN in a series of senior editorial and management roles including leading breaking news operations across Asia, the Middle East and Latin America. He currently works as a senior communications strategist, partnering with corporations and executives to develop integrated communication strategies to connect with audiences in our fast paced, ever changing engagement landscape.