A recent report by Fitch Solution, a firm providing data, research, and analytics focusing on credit risk and business strategy, predicts Morocco to overtake South Africa and become the largest vehicle production base in Africa in 2024.
The report attributed the growth in Morocco’s automotive industry to continued investments supporting local production, particularly electric vehicle (EV) projects.
In contrast, South Africa is projected to decline due to poor logistics and rising vehicle imports in 2024.
“We forecast Morocco’s vehicle production, passenger and light commercial vehicles, to reach just under 614,000 units in 2024, while South Africa’s vehicle output, passenger and commercial vehicles, will drop to 591,000 units,” reads the report.
The same source highlighted that Morocco’s rapidly developing EV industry will solidify its long-term position in vehicle production.
Conversely, South Africa, while potentially reclaiming the top spot in 2025, faces ongoing challenges to its automotive sector due to logistics, political instability, and emissions risks.
The report further emphasized Morocco’s strategic location near the EU, coupled with its robust trade agreements and efficient logistics infrastructure, as key factors driving automotive investment.
It stated that the continued nearshoring of the European automotive supply chain to Morocco, coupled with the development of a local EV supply chain, a skilled workforce, and strong investment from Chinese OEMs seeking EU market access, will drive robust growth in the kingdom’s vehicle production.
For this reason, Fitch Solution forecasts annual production growth of 6.8% through 2033, reaching 1.09 million units.
It also said that the expected growth in Morocco’s automotive industry is contingent upon the EU market, given the sector’s heavy export orientation.
However, Morocco’s strategic focus on expanding trade through the African Continental Free Trade Area (AfCFTA), the US, UK through free trade agreements, and the Middle East, coupled with ongoing investments in port and rail infrastructure, should mitigate this risk for local vehicle producers, said the report.
It mentioned, on the other hand, South Africa’s automotive industry faces significant headwinds. The country’s challenging operating environment, characterized by emissions, labor, trade, and transport hurdles, is deterring investment.
The report highlighted that poor port performance and intensifying competition from Chinese and Indian OEMs will hinder local production.
That’s why Fitch Solutions forecasts a modest 0.9% annual vehicle output growth through 2033, reaching 687,000 units.
It underscored that the EU’s Carbon Border Adjustment Mechanism could exacerbate the country’s challenges given its reliance on coal and inefficient logistics, further discouraging investment and hindering the country’s electrification progress.
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