French car maker PSA opens $630 million Morocco plant

FILE PHOTO: A PSA Group logo is seen behind a car displayed during French carmaker's news conference as they announce the company's 2018 results at their headquarters in Rueil-Malmaison, near Paris, France, February 26, 2019. REUTERS/Christian Hartmann

RABAT (Reuters) - French carmaker PSA on Friday opened its 555 million-euro($630 million) factory in Kenitra’s Atlantic Free Zone, near Rabat.

PSA will initially produce an annual 100,000 cars in 2020 increasing to 200,000 by 2023, Morocco’s Industry Minister Moulay Hafid Elalamy said at an official inauguration ceremony.

PSA’s investment has encouraged the setting up of plants by 27 car part suppliers in Kenitra including Citic Dicastal, world leading aluminum wheels manufacturer.

Automotive sector sales accounted for 27.1% of Morocco’s exports at 27.7 billion dirhams in the first four months of 2019, up 0.3% compared to the same period last year. The North African country is also home to production plants of French carmaker Renault.

The new plant is expected to boost Morocco’s exports as it struggles to curb a trade deficit that widened by 5% to 67.2 billion dirhams ($7 billion) in the first four months of 2019 compared with the same period last year.

Reporting by Ahmed Eljechtimi and Zakia Abdennebi