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Manufacturing Trade & Money

Volkswagen to Build First Factory in Morocco

German giant automobile manufacturer Volkswagen is set to construct an assembly plant in Morocco.

According to Africa Intelligence, the company “is putting the finishing touches to a business plan for “the establishment of an assembly plant in the country.”

The website added that representatives of the company have recently been in contact with Moroccan branches of “several international banks with a view to negotiating potential financing.”

Morocco has been hoping to attract international investments, especially in the automobile industry.

According to the website, Morocco has been trying to convince Volkswagen to establish itself in the North African country since 2011.

“Industry minister Moulay Hafid Elalamy (“MHE”) tried everything he knew to convince the group to come in 2015,” wrote Africa Intelligence.

Morocco has two international automobile companies producing cars in the country, a Renault plant in Tangier and PSA (Peugeot Citroen) plant in Kenitra, near Rabat.

The industry minister aims to increase Moroccan automobile production to one million vehicles a year by 2025.

The minister said in April: “We are going to exceed MAD 100 billion of export sales which is expected by 2020, but I will take a new bet and raise the bar to MAD 200 billion export with a production capacity of one million vehicles by 2025.”

In 2017, Morocco produced 345,000 passenger vehicles, overtaking South Africa, which produced 331,000, as the continent’s biggest producer, according to a report by IOL.

The report stated that South Africa, traditionally the continent’s leading car-producing country, is intimidated by Morocco’s growing production capacity in the automotive sector.

In 2017, Morocco’s automotive industry recorded a turnover of MAD 70 billion compared to MAD 40 billion in 2014.

The minister said that the automotive sector created 83,845 new positions between 2014 and 2017.

Volkswagen had already established itself in North Africa in July 2017 with a “simple kit assembly site” in Algeria, according to African Intelligence.


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