Recently published research from Business Monitor International, "Morocco Autos Report Q3 2013", is now available at Fast Market Research

Boston, MA -- (SBWire) -- 08/01/2013 --As Morocco continues to vie with other countries in the area as a low-cost manufacturing hub, the inauguration of Renault's Melloussa plant in Tangier has lifted the country's credibility in the eyes of foreign carmakers. The company's presence also serves as a boon for the local parts subsector, with almost half of Renault's units in the country derived from domestic suppliers.

As such, the country is currently working hard to entice other major global auto brands to establish a presence on its shores, according to Industry Minister Abdelkader Amara. The minister said in late 2012 that a number of international groups were interested in Morocco as a 'promising industrial platform'. By mid-2013, Amara claimed that talks with additional foreign players were at an advanced stage, with potential investment by India-based Tata Motors. The optimism is counterbalanced, however, by an improving but ongoing shortage of skilled workers. Although the government has confronted the problem directly by establishing industry-run training academies, the skills shortage is only beginning to turn and its resolution is more a long-term one.

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Production risks remain considerable in Morocco as the country must contend with rivals also pitching themselves as low-cost options for foreign carmakers. Renault, for example, is returning to Algeria as it plans to begin production at a new plant at around 25,000 units in 2014. The output is targeted at the domestic market from but could potentially rise to 75,000 units.

Conversely, Renault subsidiary Dacia said in April 2013 that it might shift production to Morocco if pay conflicts in Romania are not solved soon. This comes after workers at Dacia's Pitesti plant stopped production for two days in March, as they demanded a 40% pay increase instead of the 9% offered by the company. The two-day strike reportedly resulted in a EUR20mn (US$26.1mn) loss to the automaker. Dacia's vice-president Constantin Stroe said that the company aims to shift production as an employee at its Moroccan plant on average earns only 54% of a Romanian employee's salary.

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