Morocco to Surpass South Africa as Africa's Top Vehicle Producer in 2024: Fitch Solutions

A recent report by Fitch Solutions predicts that Morocco will overtake South Africa as Africa's largest vehicle production base in 2024. The report credits Morocco's growth to significant investments, particularly in electric vehicle (EV) projects, which are expected to boost local production.

According to the forecast, Morocco's vehicle production, including passenger and light commercial vehicles, will reach nearly 614,000 units in 2024. In contrast, South Africa's output is projected to decline to 591,000 units due to poor logistics and rising vehicle imports.

Morocco's strategic location near the EU, robust trade agreements, and efficient logistics infrastructure are key drivers of automotive investment. The development of a local EV supply chain and investment from Chinese OEMs are also significant factors. Fitch Solutions projects an annual production growth rate of 6.8% through 2033, reaching 1.09 million units.

The report notes that while Morocco's automotive industry is heavily export-oriented towards the EU, expanding trade through the African Continental Free Trade Area (AfCFTA), and free trade agreements with the US, UK, and the Middle East will mitigate risks.

In contrast, South Africa's automotive industry faces numerous challenges, including emissions, labor, trade, and transport issues, which deter investment. Poor port performance and competition from Chinese and Indian OEMs are expected to hinder local production. Fitch Solutions forecasts a modest 0.9% annual growth for South Africa's vehicle output through 2033, reaching 687,000 units.

The EU's Carbon Border Adjustment Mechanism could further exacerbate South Africa's challenges, given its reliance on coal and inefficient logistics, discouraging investment and hindering electrification progress.