The Moroccan automotive market is leading the way in the MENA region as the best performer in BMI Research Group’s Autos Production Risk/Reward Index, due to the kingdom’s strong production growth outlook, low labour costs, and favorable industry policy.
In its latest industry trend analysis, the research firm, a Fitch Group company, presents its outlook for Morocco’s automotive sector. With an overall Autos Production RRI score of 48.9 out of 100, BMI ranked the Moroccan auto sector as the most attractive market in the MENA region for production opportunities.
Analyzed based on numerous factors, the kingdom manages to surpass the regional average on many fronts. However, the research firm believes there is still room for this industry to improve, mainly in terms of “the country’s logistics network and [in] growing the active labour force.”
BMI explains Morocco’s high score in the region with its vehicle production growth, which scored 98.2 points out of 100. While the country has indeed been attracting many foreign investors throughout the past years due to its growing potential, the firm forecasts Morocco’s production growth to average 18.5 percent a year till 2021. BMI points out in its analysis that this score is mainly due to the small vehicle producers currently present in the country.
One of the other main factors making Morocco’s automotive sector attractive to foreign investors is its average labour cost, rated 89.1 points out of 100. In addition to the low labour prices, the kingdom’s industry policy and the government’s efforts in developing the sector also plays a key role in luring in more manufacturers to invest in the country.
Despite its regional achievements, BMI points out that the Moroccan automotive industry is still below the global average of 50.0, adding that these results “reflect its still nascent status.”
The firm stresses that the country still has room to develop, mainly by catching up on some of its lower scores in certain components. BMI underlines Morocco’s underperformance in the Country Rewards components, where it scores just 10.9 points out of 100 for the size of its labour force, and 12.7 points for the manufacturing sector in general as a percentage of gross value added. However, BMI expects the latter to improve over time as “sectors such as auto manufacturing develop further.”
For BMI, one of the key factors in Morocco’s attractiveness to foreign investors is its geographical position between MENA and Europe and the trade opportunities that brings. However, the firm highlights the kingdom’s relatively low score on the Industry Risk side of 32.7 for logistics risk, which measures the quality and reliability of the country’s logistics network, stressing Morocco’s need to focus on this particular area.
– Morocco World News