Going to Morocco on a motorbike: a bumpy ride for Chinese manufacturers

Morocco is a North African country located along the Mediterranean Sea. With approximately 36 million people, it is an influential country in Africa. As a hybrid regime, Morocco originally endorsed a parliamentary constitutional monarchy with Prime Minister Saadeddine Othmani as the head of government, but since 2015, King Mohammed VI started a series of reforms that directed Morocco to transform into a unitary constitutional monarchy. Meanwhile, Morocco also looks to expand its foreign network by establishing new relationships with other countries, making it a new sanctuary for investors scavenging business opportunities.

Morocco has several major trading partners including China, France, Spain, and the United States. In 2000, Morocco’s free trade agreement (FTA) with Europe was put into effect. Morocco has long been a firm trading partner with the European countries. Together, 75% of Morocco’s exports go to Europe with France being the largest trading partner and Spain being the second. Morocco’s main exports are phosphates and textiles, while it imports crude oil, telecommunication equipment, transistors, and plastics.

Morocco buys most of its motorcycles from France, but there are more brands from other countries, too. A variety of brands exist in the local market, but the customers obviously prefer the low-cost motorbikes.

“Because the locals use motorbikes as a cheap alternative to cars, only low-cost motorbikes might be able to penetrate this market,” according to Ahmed El Makkaoui, a Morocco motorbikes market expert. “Morocco has not yet found an established brand that dominates the market, so opportunities for new investors abound. Morocco is also encouraging foreign motorbike investors as they can save the nation’s resources and create jobs for the locals.”

In recent years, Morocco has developed new policies that are in favour of certain investors: foreign motorbike manufacturers that have their own factories in Morocco are exempt from tariffs. This new incentive makes large scale motorbike production in Morocco much more appealing, and will largely benefit the Moroccans as well as the investors.

As Morocco’s King, Mohammed VI, visited China in 2016; Morocco and China have been making efforts to improve their trading relationship. Many new legislations have been passed to make the trading process easy and accessible. China has been increasing the trade volume to Morocco as more and more Chinese companies acknowledged this possible trading route toward Morocco. From all of the imported items, tea often takes the largest share and followed by products such as broadcasting equipment and motorcycles.

“China’s motorbike market is dominated by low-cost motorbikes that are highly advanced, and if we can open up a new market in Morocco, we are willing to make models that specifically meet the needs of Moroccan customers,” said Kang Xie, a motorbike manufacturer in China.

Like Xie, many Chinese investors believe in the market potential of Morocco, but most of them struggle to find a point of entry where they can differentiate their product from other competitors. Plus, Chinese motorbikes have an innate difference when compared to the Morocco motorbikes as they utilise different fuels.

“The current Moroccan motorbikes market is full of gasoline motorcycles. It is quite obvious that in more advanced countries, electronic motorcycles have taken the lead,” said El Makkaoui, “In China, over 90% of motorbikes are battery-powered. Some other countries like Switzerland projected a ban on all of the gasoline-fueled motorcycles by 2025, with Germany by 2030, and England by 2040.” This is a perfect market gap for foreign investors who wish to establish a brand of electric motorbikes in Morocco.

Motorcycles are widely used in Morocco because of their affordability and flexibility. Compared to cars, motorbikes are usually cheaper as they are easier to manufacture and consume less gasoline. For a developing country like Morocco, where most people can barely purchase a used car, motorcycles seem to be an ideal alternative. In addition, motorcycles render customers much more flexibility in terms of parking and avoiding traffic. Although motorbikes are usually used for private purposes, it can also serve as a freight carrier for delivering mail and light packages. A major problem that motorcycle riders face is the poor road conditions in Morocco. Motorcycle makers in Morocco, therefore, have to make adjustments to create a better riding experience, e.g. enlarging the tires, adding additional shock absorbers.

The current situation in Morocco creates a perfect chance for foreign investors. As the country’s unsatisfying GDP per capita indicates, it still needs an intermediate step before it is financially capable of increasing its private car ownership. Motorbikes can be that great alternative that will be popular among common households. Since there is not a brand that has established its complete superiority in Morocco, Chinese investors might be able to break the market with low-cost electric motorbikes.

Binhong Xie is a Chinese student at Culver Academies in the United States. He enjoys traveling and photography. His academic interests include international relations and business management.