PSA Peugeot Citroën to build all-new plant in Morocco

PSA Peugeot Citroën, which is looking to grow its business in Africa and the Middle East, has signed a car manufacturing agreement with Morocco.   

Under the chairmanship of the King, Mohammed VI, King of Morocco, Carlos Tavares, chairman of the managing board of PSA Peugeot Citroën and Moulay Hafid Elalamy, the Kingdom of Morocco’s Minister for Industry, Trade, Investment and the Digital Economy signed an agreement at the Royal Palace in Rabat to build a plant in the commune of Ameur Seflia in Kenitra province.

The plant, which will begin producing B- and C-segment engines and vehicles from 2019, will meet the needs of the region and of Moroccan customers. Starting out with an initial production capacity of 90,000 engines and vehicles, the plant will ultimately raise output to 200,000 units in line with future market demand. The planned investment is euros 557 million (Rs 4,257 crore).

This plant, according to the French carmaker, will leverage the competitive supplier base in Morocco, which will benefit from the plant's gradual ramp-up of production, as well as the development of engineering operations required for the project. The operation will have a local content rate of 60% at the launch date ultimately rising to 80%.

The agreement rounds out the existing manufacturing facilities in Nigeria and those being negotiated in Iran, and allows the Group to lay the foundations today for its ambition of selling one million vehicles in the Africa-Middle East region by 2025. Africa and the Middle East are among the Group's historic markets, particularly for Peugeot, which is a well-established brand in the region. The Group boasts a strong foothold in certain markets (it is ranked first in Tunisia and second in Morocco), while Peugeot is the number two vehicle manufacturer in Algeria.

The regional strategy focuses on gradually expanding vehicle production capacity in the heart of the region to serve the Group's customers across the Africa-Middle East markets, where potential production volume is estimated to reach eight million vehicles by 2025. Under this plan, the Africa-Middle East region will become PSA Peugeot Citroën's third largest profitable growth market.

Commenting on this new agreement, Carlos Tavares said: "Africa and the Middle East are among PSA's historic markets and we must make this region a key driver of international growth as part of our ‘Back in the Race’ plan. The agreement signed today with the Kingdom of Morocco will allow us to increase our production capacity in the heart of the region in order to achieve our goal of selling one million vehicles by 2025."