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Viewing report
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Morocco Autos Report Q4 2011
Business Monitor International, Sep 2011, Pages: 44
The Moroccan auto industry has experienced a positive first half of 2011, in line with BMI’s views, although an 8% fall in new vehicle sales over July has caused some concern. A total of 67,331 new cars were registered over the first seven months of the year, according to the L’Economiste newspaper, an increase of 4,97% year-on-year (y-o-y). Of this total, some 88% were passenger cars. Renault remains the dominant force in Morocco, both via its own-branded cars and its Dacia subsidiary. As at end-July, Renault/Dacia sold 24,910 vehicles year-to-date, for a market share of 37%, according to L’Economiste. Other important carmakers include Peugeot, Ford and Hyundai.
Given this positive start to the year, we maintain our forecast for a 3% increase in new car sales this year, believing that the fall in sales during July is more likely to be a one-off seasonal effect ahead of the Ramadan festival period, as opposed to the start of a renewed downward trend in car sales. Our macroeconomic team is upbeat on Morocco, targeting GDP growth of 4.1% for 2011 and with consumer confidence surveys reporting upbeat sentiment. In addition, our core view is for inflation to fall over the coming 12 months, which may give the central bank scope to ease interest rates from current levels of 3.25%. This would potentially boost the attractiveness of finance deals to purchase new vehicles.
Beyond the current year, much will depend on the durability of economic growth in Morocco and also whether calls for greater democracy will lead to civil unrest of a type seen in Libya and Egypt. In this context, our Political Risk team believes that there is a risk of short-term unrest ahead of parliamentary elections scheduled for November 2011, although there will be no serious threat to the reign of King Mohammed VI. For now, we are forecasting a gradual 4% increase in new car sales over the remainder of our forecast period to 2015.
In 2010, the International Organisation of Motor Vehicle Manufacturers (OICA) estimated that Morocco produced some 50,000 vehicles, an increase of 7.1% y-o-y. In the absence of any comprehensive locally sourced full-year data on Moroccan vehicle production, we use this figure as the basis for our forecasts to 2015. The bulk of local vehicle production came from the Renault-owned Somaca facility, which was estimated at 42,000 units for the year, according to local media reports. In Q410, it was also reported that PSA Peugeot Citroën was to stop local production of its Partner and Berlingo LCVs at the Somaca facility, effective December 2010, when its current contract ended.
This development may lead to 2011 production figures coming in slightly lower than we currently anticipate. However, this short-term drop in production will not last long, with Moroccan auto output to be given a significant boost once Renault’s Tangier Méditerranée plant opens in 2012. Indeed, the impact of the new plant will increase the amount of Moroccan auto production by a factor of 10, with output set to be well above 450,000 units per annum by 2015.
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