Israel to import Moroccan cars as trade hits $8.5 billion

Israel is set to increase imports of cars manufactured in Morocco, strengthening economic ties between the two nations. This development comes as Morocco’s automotive sector thrives, positioning itself as Africa’s leading car producer. With over 250 companies involved in car manufacturing and components production, Morocco’s automotive industry is a key player on the global stage.

“We see enormous potential in expanding our imports from Morocco, especially as the industry continues to grow,” said Israeli Foreign Minister Israel Katz. “This collaboration benefits both our economies and strengthens the bond between our countries.”

The Moroccan government has invested heavily in its automotive sector, contributing 22% to the country’s Gross Domestic Product (GDP) and generating $14 billion in exports annually. The industry has over 250 companies involved in car manufacturing and components production, employs 220,000 people, aiming to further develop electric vehicle production.

Trade shift amid Turkish embargo

The increased trade with Morocco comes as Israel faces a disruption in vehicle imports from Turkey. An embargo imposed by Turkey in response to Israeli military actions in Gaza halted the arrival of key brands like Hyundai, Toyota, and Ford. In response, Israel has sought alternative markets to fill the gap.

In the coming months, Israeli consumers can expect to see a range of Moroccan-made cars, including models from French carmakers Renault and Peugeot. Notably, the Peugeot 208, produced at Stellantis’ Kenitra plant, will soon arrive in Israel. Stellantis, formed by the merger of Fiat Chrysler and Groupe PSA Peugeot, plans to double production at its Kenitra facility to 450,000 vehicles annually, creating 2,000 new jobs in Morocco.

Diplomatic gains from the Abraham accords

The strengthened economic cooperation between Israel and Morocco follows the re-establishment of diplomatic ties in 2020 under the Abraham Accords. Brokered by the United States, the agreement has led to increased trade, investment, and technological collaboration between the two countries.

Trade between Morocco and Israel surged 124% to $8.5 billion in June 2024 compared to the previous year, according to the Abraham Accords Peace Institute. This rapid growth underscores the benefits of the diplomatic relationship, which has expanded into sectors such as defense, technology, and agriculture.

However, some opposition remains to Morocco’s growing ties with Israel. Critics point to Israel’s ongoing military operations in Gaza, which have resulted in thousands of Palestinian casualties. The Israeli offensive was launched following Hamas attacks on October 7, 2023, which killed 1,200 Israelis and led to the abduction of 250 people.

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