Morocco emerges as a key driver of Africa’s automotive industry

08:15

By: Azzat Manal

Morocco emerges as a key driver of Africa’s automotive industry

Morocco is emerging as one of the main automotive manufacturing hubs in Africa, according to a study by TradeMark Africa, which identifies the Kingdom alongside South Africa, Kenya and Nigeria as four major centres shaping the continent’s automotive industry.

The study places Morocco at the heart of North Africa’s automotive ecosystem, highlighting the country’s growing role in manufacturing, component production and vehicle exports. Together, Morocco and South Africa account for about 80.6% of Africa’s automotive export market, underlining their importance to the continent’s integration into international automotive supply chains.

Africa’s automotive market is estimated at around $30.44 billion and is projected to reach approximately $42.06 billion by 2027, representing an increase of about 38.2%. The expansion of the sector could create opportunities for greater cooperation between African economies operating at different stages of the automotive value chain, from components and spare parts to assembly and exports.

Morocco’s position is closely linked to the development of an integrated industrial ecosystem in North Africa. The country’s automotive cluster has developed strong links with neighbouring markets, including Tunisia and Egypt, while regional production networks can connect vehicle manufacturers with component producers, suppliers and logistics companies across the region.

The growth of Morocco’s automotive sector has been supported by the expansion of industrial infrastructure and the presence of international manufacturers and suppliers. The country has increasingly positioned itself as an export-oriented production base, with automotive products forming an important part of its industrial exports and links to European and other international markets.

TradeMark Africa’s assessment also points to wider challenges facing the development of automotive manufacturing across the continent. These include limited industrial capacity in some markets, infrastructure constraints, energy-supply issues and shortages of specialised skills. The continued presence of used vehicles in several African markets also creates additional pressure on the development of new-vehicle manufacturing and sales.

The broader trade figures illustrate the scale of the challenge. Africa accounted for only around 3% of global trade, with merchandise exports valued at approximately $614.58 billion in 2023 compared with imports of $699.36 billion, resulting in a trade deficit of about $84.78 billion.

At the same time, intra-African trade has been expanding. Trade between African countries reached approximately $193.17 billion in 2023, an annual increase of 18.6%. The study also highlights the growing importance of processed and higher-value products in regional trade, suggesting that deeper industrial integration could help African economies retain a larger share of the value generated by their exports.

The report estimates that domestic value added represents only about 14% of African exports, compared with roughly 27% in emerging Asian economies and 31% in advanced economies. Much of Africa’s participation in global value chains remains concentrated in commodities such as oil, minerals and other raw materials.

Against this backdrop, the automotive industry offers an opportunity to diversify African manufacturing and increase the continent’s participation in more sophisticated international supply chains. Vehicle production requires a broad network of industries, including metals, electronics, plastics, logistics, engineering and specialised services, potentially creating opportunities for suppliers across several countries.

However, the sector remains exposed to international trade tensions and disruptions in global supply chains. African manufacturers depend on imported components and materials for several key parts, including engines and transmissions, meaning changes in tariffs, transport costs or international trade policies could affect production costs.

For Morocco, the expansion of automotive manufacturing represents both an export opportunity and a broader industrial-development strategy. The country’s growing production base and connections with international markets have strengthened its role in Africa’s automotive landscape, while further integration with regional suppliers could contribute to the development of more diversified African value chains.

The TradeMark Africa study therefore places Morocco among the countries with a significant role in shaping Africa’s automotive future. As the continent seeks to expand intra-African trade and increase local value creation, the development of automotive manufacturing could become an important component of efforts to move from the export of raw materials toward more diversified industrial production.