The total Chinese investments announced in 2023 in the automobile industry in Morocco amount to around $9.5 billion, a record.
Chinese interest in the Sharifian Kingdom is not without reason. Behind this lie factors ranging from the development of diplomatic relations between the two countries to the desire of Chinese companies to circumvent American restrictions. As well as the determination of Asia’s largest economy to strengthen its presence on the African continent particularly in Morocco.
Existing infrastructure
Morocco already has a modern automobile manufacturing platform, led by Renault and Stellantis. With an annual production capacity of approximately 700,000 vehicles. It is expected to reach the threshold of one million cars by 2030. Exports from the sector would reach $14 billion in 2023.
In addition, the excellent diplomatic relations between Rabat and Beijing are the basis of the growth of Chinese investments in the Kingdom. China is one of Morocco’s main trading partners, with trade worth $7.5 billion. Certainly, the trade balance leans largely in favor of the Asian giant, imports are 22 times exports.
Moreover, King Mohammed VI made three visits to China. The last one dates back to 2016, when a strategic partnership agreement was signed covering several sectors. Then, in 2022, Rabat also participated in China’s “Belt and Road” initiative. Which plans to inject tens of billions of dollars of investment into countries located along the economic corridor.
The attractiveness of the battery industry
In addition, Chinese investments announced in Morocco in 2023 focused on the manufacturing of electric car batteries. The country attracts great interest due to the availability of materials used in the manufacture of its batteries, such as cobalt and phosphate.
The largest Chinese investment in this area was announced in May by GOTION High-Tech Group, to establish an industrial system for producing electric car batteries and energy storage systems. With investments estimated at around $6.3 billion.
In September, battery component maker CNGR Advanced Material announced plans to build an industrial base in Morocco at a cost of $2 billion. Previously, in April, the BTR New Material group, which produces components for electric vehicle batteries, committed to investing $1.2 billion in a production unit. Thus bringing the total volume of these three investments to represent 9.5 billion dollars.
A potential market of a billion consumers
The Kingdom has 54 free trade agreements that allow its products to access markets whose total number of consumers is estimated at more than a billion people. This constitutes an important factor in supporting the flow of foreign direct investment, including Chinese.
The most important agreement Morocco has is the one signed with the United States. This is an attractive point for Chinese producers wishing to export to Uncle Sam’s country and Europe, in the face of new protectionist policies.
The Moroccan automobile industry has been able to build an integrated system that includes more than 260 factories, with a steady trend toward electric cars. Around 50,000 electric cars are currently produced each year. According to the authorities, Morocco is ranked first worldwide in terms of price competitiveness, ahead of India and China. A model to follow.
