Issue: Aug 2006


Global trade in automotive parts: Morocco Free Trade Agreement creating opportunities



by Michael Stewart

Auto parts manufacturers in the Kingdom of Morocco are focusing on the competitive dynamics of the USA aftermarket. Earlier this year Moroccan parts companies took advantage of a recently launched Morocco New Business Opportunities (NBO) program. The program is financed by the US Agency for International Development and executed by Nathan Associates, a USA economic consulting firm. NBO helps Moroccan firms export to the USA and take advantage of the USA-Morocco Free Trade Agreement (FTA), which began January 1, 2006.

Site visits in Morocco, seminars, and one-on-one meetings are part of the NBO initiative. Mr. Henry P. Allessio, managing director of Walden Consultants Ltd. is the Senior Automotive Parts Sector Consultant for the NBO program. He has established a liaison with dozens of Moroccan parts manufacturers that are eager for a better understanding of the USA market requirements to enable sales to be made in the most effective ways.

Mr. Allessio reports, “The product quality across the board is exceptional. ISO and forthcoming TS certifications are the rule, and the suppliers have years of experience serving the OE requirements of Western Europe.” “Moreover,” Allessio continues, “the positive attitude of the top managements is an attribute which will support good relationship building from the onset as these companies demonstrate their capabilities to interested American companies.” The sales development activities that are underway are expected to gain momentum in the coming months.

Morocco has an educated workforce with an average wage which is ­­­about one-fifth that of auto manufacturing wage levels in the EU (Spain), and about the same as those in Turkey. For USA importers, the USA-Morocco FTA will, of course, reinforce Morocco’s cost advantage by eliminating tariffs. Some quotations submitted by Moroccan companies have been competitive with Asian-made goods.

Current NBO efforts are focused on developing aftermarket relationships in the USA for specific Moroccan companies that supply filters (oil and air), radiators, brake friction, and clutch facings. Existing applications span golf carts, passenger vehicles, and heavy-duty trucks. Future activities will include additional products, and an examination of OE opportunities at various tier-levels of supply. Other products preparing for USA market entry are: exhaust, pistons, leaf springs, control cables, tempered glass, seats, electronic assemblies, lighting lens, and a wide range of plastic molded items.

Walden Consultants Ltd. regularly conducts corporate strategy, marketing, competitive analysis, and acquisition planning assignments for domestic and foreign clients. Automotive businesses are one area of specialization for the management consulting firm which has offices in Hopkinton, Mass.



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