Morocco faces growing competition for automotive investment as European countries seek to rebuild domestic manufacturing capacity, potentially redirecting projects and investments previously earmarked for the Kingdom, Industry and Trade Minister Ryad Mezzour said Tuesday.
Speaking before the House of Representatives’ Productive Sectors Committee during a presentation of his ministry’s proposed 2027 budget, Mezzour said Europe’s industrial policy shift could encourage manufacturers to relocate part of their production closer to their home markets.
He said Morocco’s competitiveness in the automotive sector has relied largely on lower production costs and wages compared with investors’ countries of origin. A recovery in European manufacturing capacity could therefore weaken one of the factors that have made Morocco attractive to international automakers.
Mezzour pointed to the European Parliament’s discussions on the proposed Industrial Acceleration Act, which aims to strengthen Europe’s industrial production capacity. He said the text included a target of having 80% of car production take place within Europe, a development that could affect Morocco’s ability to attract industrial investment.
The minister also highlighted the implications of Europe’s transition toward electric vehicles, saying manufacturers could continue producing diesel and other conventional vehicles for longer and direct them toward other markets as they navigate the transition.
Mezzour said discussions around these European policy changes had begun around 18 months ago and coincided with the redirection to Europe of several investments and projects that had been expected to come to Morocco.
He warned that the full economic impact might not become apparent in the coming five years, even if Morocco continued to post positive economic indicators during that period.
Mezzour urged Morocco to prepare for the changes immediately by accelerating the adoption of robotics, industrial automation and artificial intelligence, while strengthening innovation and expanding into more international markets.
He also called for supporting the development of Moroccan brands capable of establishing themselves in the domestic market and expanding into neighboring and European markets.
Addressing lawmakers, the minister said responding to the transformation would require a coordinated effort involving the country’s economic and political stakeholders, describing the shift as a major test for the national economy.
