The Automotive Cluster in Morocco

Harvard Business School (1260) | Microeconomics of Competitiveness | Automotive Cluster Morocco |05-08-15
Executive summary
The Moroccan economy has performed strongly over the last 15 years with an
average real GDP growth of around 4%. The automotive cluster has been one of the recent
success stories of the Moroccan economy. It has grown into a cluster with a vehicle
production of 167,000 per year, €2.8 billion in exports and 85,000 employees. Renault is
the predominant car manufacturer in Morocco.
The Moroccan automotive cluster has had a strong value proposition. First, it
offered a good place to start an automotive cluster: strategic location close to Europe and
emerging markets, free trade agreements with large consumer markets, and a stable
political environment. Second, the government made significant investments to make the
business environment more attractive: investments in training centers, special economic
zones, infrastructure, and tax incentives for automotive producers.
However, this value proposition is not sufficient to maintain the same growth rate in
the future. In order to make the cluster more competitive and perpetuate growth in the
short, medium and long term, we make 5 recommendations. In the short term (before
2017), Morocco needs to optimize its current strategy by 1) investing more in training and
starting education reform, and 2) organizing better collaboration between stakeholders. In
the medium term (before 2020), the cluster needs to find new sources of demand and
reach new scale levels in production. This can be realized by 3) exporting more to emerging
markets in the Middle East and Africa, and by 4) attracting a second large manufacturer
and suppliers in missing segments. Finally, in order to continue growth in the long term
(after 2020), the cluster needs to 5) move up gradually towards more value adding
activities, such as R&D and design.
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