Russia’s invasion of Ukraine has left the automobile parts industry at bay. As per the experts, the global production of vehicles is expected to go down if the product is still to be continued in Ukraine. Verband der Automobilindustrie, a German auto parts-making company, announced in March that the shortage of parts is expected to fall if the Ukraine crisis continues.
However, many companies had left the country and set up their operations elsewhere before the crisis hit hard, and there was equal to zero production. Morocco is being seen as a hub today for the automobile part makers due to its nearness to Europe and its beneficiary trade ties with the mainland. In addition, due to the free trade agreement, Morocco is free from taxes attracting more investors to the country.
Japanese company Yazaki, an automobile part maker whose main production is wire harnesses, is the first to flee and move to North Africa. It intends to invest a sum of 9 billion Yen only in its existing Moroccan plants. Furthermore, 5 billion Yen is to be invested in Meknes, which lies in the north of Morocco. It also plans to expand more toward Tangier, Kenitra, and Egypt.
Likewise, Fujikura and Sumitomo Electric Industries are also moving towards Morocco and ceasing their operations in Ukraine. Chongqing Polycomp International Corp will be investing too in Morocco soon. Kasai Kogyo aims to produce sun visors in Morocco in the coming year for exportation to Europe.
Like Eastern Asian countries, the Western side is also shifting toward Morocco for its production of auto parts to avail the benefits of easy trade. Renault already has its production being done in Morocco, while US company Lear Corporation and Germany’s Stahlschmidt have plans to invest in production in Morocco in the coming years. Tangier, lying in the northwestern part, is taking advantage of the port and will have these western countries set up their operations there due to the nearness to the region and port facility.
Due to all such heavy investments in the region, today, Morocco is the second-largest manufacturer of auto parts in Africa after South Africa. Moreover, the Moroccan sector is growing due to its nearness to Europe and its neighboring countries, making huge profits. Besides Morocco, Egypt is expanding its horizon and taking in investors like the Japanese firm DMG, which manufactures lathes and tool-cutting machines. It will too be operating its set up in Egypt by 2023.
