Recently published research from Business Monitor International, "Morocco Autos Report Q1 2014", is now available at Fast Market Research
Boston, MA -- (SBWIRE) -- 01/09/2014 -- Morocco's highly competitive production environment, government support towards manufacturing and its proximity to the high-volume European markets and high-growth potential African markets are main attractions for carmakers seeking for production-related investments in the country. BMI accordingly sees production in Morocco rising considerably over our five-year forecast period, with a total completely built unit production of 146,753 in 2017. Our forecast for 2013 looks set for 118,300 vehicles to be produced over the year, marking an 8.8% increase from 2012.
However, vehicle sales will fail to replicate growth in the production segment. Industry estimates indicate that passenger car sales in the country were down 7% year-on-year (y-o-y) to 59,748 units during the first half of 2013. BMI believes the fall in car sales reflects the ongoing weaknesses in private consumption.
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Morocco's external environment remains weak, with remittances, tourism receipts, and exports staying far below trend. Furthermore, growth in bank lending has remained anaemic. According to Bank Al-Maghrib (BAM) data, overall credit growth reached just 2.7% in June 2013 in annual terms; the pace of expansion seen thus far in 2013 has been the lowest since December 2002. On the brighter side, BMI's outlook for the Moroccan economy has changed. We expect the Moroccan economy to experience weak growth throughout 2014, after having reaped benefits from an agriculture-based recovery in 2013. The near-term outlook for non-agricultural economic activity remains weak, with subdued prospects for private consumption in particular. We have revised down our 2014 real GDP growth forecast to 2.8% from the previous forecast of 3.0%.
Encouragingly, in October 2013, Renault announced it is expanding Dacia production at its plant in Tangier, Morocco to help meet strong demand in Europe for the Sandero, which is Dacia's top-selling model in Europe, where sales rose 59% to 79,586 units in the first eight months of 2013. The expansion will increase capacity at the plant from 200,000 vehicles a year to 340,000 by 2014. Over 90% of the output will be exported, mostly to Europe.
Renault will produce the Dacia Sandero and Sandero Stepway on the new line, which will cost the automaker EUR400mn to add. The original line, which produces the Dacia Lodgy and Dokker, began operation in January 2013 and produced its 100,000th vehicle in June 2013. Renault said an additional 1,400 people have been recruited, increasing the total work force at the zero-emissions plant to 5,000. The factory currently operates on a two-shift basis.
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