Industry Trend Analysis - Magneti Marelli To Sure Up Morocco's Supply Chain - NOV 2017

BMI View: T he investment by Magneti Marelli in establishing an automotive component facility in Morocco will strengthen Morocco ' s ability to meet its goal of producing 1mn vehicles annually in the next 10 years.

The MAD441mn (USD46.7mn) investment by Magneti Marelli, a Fiat subsidiary, into a manufacturing facility specialised in automotive components for the North African market was announced September 26 2017 and it will initially produce shock absorbers in Morocco's Tangier Free Zone (Tanger Automotive City). Morocco will require a solid local supply chain if it is to meet the government's vehicle production target to produce 1mn over the next 10 years and this most recent investment should significantly improve Morocco's ability to meet this ambitious target by helping the supply chain mature and develop.

Magneti Marelli's move will support the burgeoning production of finished vehicles in the country by offering more reliable local supply options as an alternative to imported components. We forecast Morocco's domestic vehicle production to grow 16.1% in 2017 and at an annual average of 18.5% to 2021, reaching around 800,000 units by the end of our forecast period ( see chart above). As vehicle production expands, original equipment manufacturers (OEMs) producing locally will increasingly look to source from a developed local supply chain in order to reduce their reliance on imports of components ( see 'Renault's Ecosystem To Further Cement Morocco's Autos Strategy', April 13).

Morocco Looking Poised To Reach Its Goals
Morocco - Vehicle Production
f = BMI forecast. Source:BMI, OICA

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