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PSA invests in Morocco plant with a view to export 24 June 2015

Supplier base in Morocco will benefit from the gradual ramp-up of production

PSA assembly at VigoPSA Peugeot-Citroen has revealed plans to build a €557.0 million production plant in Morocco.The agreement, signed by Carlos Tavares, chairman, managing board, PSA Peugeot-Citroën, and Moulay Hafid Elalamy, the Kingdom of Morocco’s minister for industry, trade, investment and the digital economy, is to build a plant in the commune of Ameur Seflia in the Kenitra province. The plant will produce B and C segment engines and vehicles from 2019. PSA said it will meet the needs of the region and of Moroccan customers.

After an initial production capacity of 90,000 engines and vehicles, the plant will raise output to 200,000 units in line with future demand. The competitive supplier base in Morocco will benefit from the gradual ramp-up of production, and the development of engineering operations. PSA plans to use 60% local suppliers from the launch date, and eventually raise this to 80%.

The proposed location will put the site in the Atlantic Free Zone, run by local development company Medz, according to Fletcher.

This announcement will see the Africa-Middle East region becoming PSA’s third largest profitable growth market, and reducing its reliance on Western Europe. PSA plants to sell 1m units per annum in Africa and the Middle East by 2025.

Until 2010, PSA manufactured small volumes of Peugeot Partner and Citroën Berlingo at Société Marocaine de Construction Automobile, which it shared with Renault in Casablanca, Morocco, before Renault took over full control of the plant. The announcement therefore marks a return to vehicle production in Morocco by the OEM. PSA is keen to tap into the North African market, which is predicted to grow strongly over the next few years.