PSA Peugeot-Citroen and the Kingdom of Morocco recently signed an agreement for the automaker to build a plant in the commune of Ameur Seflia in Kenitra province, which will begin producing B and C segment engines and vehicles beginning in 2019. 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.
This plan 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. With a local content rate of 60 percent at the launch date ultimately rising to 80 percent, local automotive equipment suppliers are set to enjoy very sharp business growth, according to the automaker.
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, according to the automaker.
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 8 million vehicles by 2025, according to the automaker. Under this plan, the Africa-Middle East region will become PSA Peugeot Citroën’s third largest profitable growth market.