100 million yuan! China Shanghai Auto Parts intends to set up a wholly-owned subsidiary in Morocco
Morocco is consolidating its position as an important platform for the global automotive industry.
Chinese auto parts giant Shanghai Auto Parts plans to inject 100 million yuan (about 1.3 billion dirhams) to set up a subsidiary in Morocco, marking a new level of Sino-Moroccan cooperation and Moroccan industrialization.
I. A bridge connecting African and European markets
ccording to the announcement released by Shanghai Stock Exchange, Shanghai Automotive Parts & Components plans to set up a wholly-owned subsidiary in Morocco - Shanghai Automotive Air Conditioning Parts (Morocco) Co.
The budget is RMB 100 million, and the funds will be used for land acquisition, new plant construction and procurement of advanced production equipment.
The subsidiary will focus on serving the European and African markets, shortening delivery times and improving customer service efficiency.
Morocco's unique geographical location makes it a bridge between the European and African markets. Shanghai Auto Parts clearly hopes to optimize its global supply chain layout and expand its international market presence.
Morocco's strong performance in automotive manufacturing and exports in recent years has attracted a large number of multinational companies to invest in the country, which is gradually developing into an integrated industrial center.
More than 260 factories are now operating in Morocco, producing around 50,000 electric vehicles per year, demonstrating the industry's transition to sustainable and innovative technologies.
The addition of Shanghai Auto Parts will provide strong support to Morocco's existing industrial ecosystem, particularly in key components such as automotive air conditioning systems and heat valves.
This investment not only boosts Morocco's industrial diversification, but also further strengthens its position as an important hub for the automotive supply chain in Africa and Europe.
2.Second, an important step in geographical diversification
Shanghai Auto Parts' investment fully reflects its globalization strategy.
The Moroccan subsidiary will serve the European and African markets, while the Mexican subsidiary will focus on the American market, and the Chinese plant will continue to serve the Asian market.
In the first half of 2024, the company's revenue from foreign sales increased by 79.34% compared with the same period last year, and the gross profit margin of foreign sales was about 26%, which became an important source of its profit growth. The establishment of a new subsidiary in Morocco will further boost the growth of the company's international business.
Through this layout, Shanghai Auto Parts hopes to optimize its supply chain and shorten its delivery cycle, as well as improve its responsiveness to international customers.
Chinese companies have significantly increased their investments in Morocco in recent years. By the end of 2023, cumulative Chinese investment in Morocco will have totaled $9.5 billion, mainly in the automotive and renewable energy sectors.
The addition of Shanghai Auto Parts once again strengthens the depth of China-Morocco economic cooperation. The project not only helps Morocco boost its industrial capacity, but also provides Chinese companies with new channels to enter the European and African markets.
The Moroccan government has actively launched policies to provide tax incentives and administrative facilities for foreign companies, which is an important factor in attracting global companies such as Shanghai Auto Parts.
3.Third, build a multilateral win-win industrial chain
With the landing of the Shanghai auto parts project, Morocco's automotive industry will usher in more opportunities for cross-border cooperation. This investment is expected to help Morocco export more high-quality auto parts to the European and African markets.
Through the introduction of advanced equipment and technology, it will accelerate the transformation of Morocco's automotive industry to high-end manufacturing.
The construction and operation of the Shanghai auto parts plant will directly create a large number of jobs, while driving the development of upstream and downstream industry chain.
Morocco's automobile industry is in a fast-growing stage, attracting global enterprises' attention by virtue of geographical advantages and policy support.
The investment of Shanghai Auto Parts will not only bring new momentum to the Moroccan industry, but also inject more vitality into China-Morocco economic and trade cooperation.