Morocco, along with Algeria, is well placed to step up in North Africa as Egypt suffers from political turmoil. We believe 2012 is set to be a momentous year for the Moroccan auto industry. Renault and its Japanese partner Nissan Motor are constructing an assembly plant costing US$1.2bn in Tangier, and we believe this marks a major shift in the nature of the country's industry and market. The plant, which will be Africa's biggest, is a response to Renault's view that African buyers will now prefer to buy new cars over new ones. The company also plans to build a factory in Algeria, but has not yet set a timetable for its construction. Renault reportedly sees Africa as a major growth market that can rank alongside the BRIC markets. Renault Group now operates two plants in Morocco. Its sales in the country rose 22.4% in H112 and it boasts a 37.6% market share.
Renault has also announced that the Tangiers plant will produce another Dacia model, the Dokker - a newly designed van. In a novel move, the model will only be on sale in Morocco, before being rolled out in other markets across Europe and the world.
BMI expects such developments to spur greater investment in the country's auto industry, as a sizeable domestic components industry is now viable. Companies have already begun to respond to these changes, notably the Delphi's decision to expand Moroccan production.
BMI sees production in Morocco rising considerably over our five-year forecast period, with a total completely built unit production of 70,545 in 2016. Our forecast for 2012 looks set for 50,854 vehicles to be produced over the year. This number will largely be exported to the EU. This is notable of a sharp divergence from a sufficiency situation, where the number of produced vehicles far outstrips domestic demand.
Sales in Morocco will not grow as rapidly as production. We expect annual production growth to average 8.0% between 2012 and 2016, compared with 6.7% for sales growth.
We forecast that the...