The logic behind the location is clear: the Tanger Med port provides a fast and cost-effective connection between the plants and Europe, just around 15 kilometres away. Morocco also has a free trade agreement with the EU, providing tariff-free access to neighbouring European markets. Labour costs are around a quarter of those in Spain and therefore also significantly below levels in Eastern Europe.
A foundry ecosystem built from scratch
Where vehicle production grows, casting follows. CITIC Dicastal, which describes itself as the world’s largest manufacturer of aluminium wheels for passenger cars, opened two wheel plants in Kenitra in 2019 and 2020. At full capacity, they can produce a combined six million wheels per year using low-pressure die casting, the standard process for wheel production.
At the end of 2023, a third plant, “Dika Morocco Castings”, was added following an investment of around 180 million Euros. For the first time, the plant produces cast components for engine blocks and chassis applications, with an initial capacity of five million parts per year. Ninety per cent of production is destined for export to Europe and the United States. According to the company, the entire complex runs on green energy and has its own high-voltage substation designed to improve both energy efficiency and security of supply.
At the same time, South Korean group Hands Corporation, one of the world’s five largest wheel manufacturers, began building a plant in Tanger Automotive City in 2018. More than 400 million Euros was invested in the site, which is expected to produce eight million wheels per year once fully operational, with 85 per cent destined for export. Morocco’s Ministry of Industry subsequently described the country as the world’s third-largest producer of aluminium wheels – a government claim that is difficult to verify independently, but whose scale is nevertheless striking.
The Chinese footprint
According to the company, the Dicastal complex is the largest industrial project since 2016 and forms part of the Belt and Road Initiative, China’s global infrastructure and trade programme. Chinese companies are estimated to have invested or committed around 10 billion US dollars in Morocco’s automotive and battery production. One reason is the country’s aforementioned free trade agreement with the EU, which under certain conditions provides favourable tariff access to the European market.
The direction of knowledge transfer is also noteworthy. According to the company, experience gained at the Moroccan flagship plant is expected to guide operations at sites in Mexico, the United States, Germany and China in future. The model for the factory of the future is therefore located in North Africa rather than Europe.
More difficult access
Access to Europe has recently come under pressure, however, as EU anti-dumping duties of 9 to 17.5 per cent have applied to Moroccan aluminium wheels since 2023, with additional countervailing duties introduced in March 2025. In response to these developments, CITIC has already paused construction of another plant in Kenitra and redirected investment to Portugal.
Morocco is therefore far from an ideal location for Europe. The shortage of skilled labour is growing as quickly as industrial capacity, water scarcity is becoming an increasingly critical constraint, and the local supplier base beneath the major plants remains relatively thin. In addition, the entire system depends heavily on two automotive groups and on the European sales market, where demand is currently anything but predictable, not least because of fluctuating conditions in the automotive industry.
The window is open
For Europe’s die casting industry, Morocco may be less a threat than a mirror. The country shows that competitive, digitalised and low-emission foundry production is possible in Europe’s immediate vicinity. And the industrial build-up there requires exactly what Europe’s supplier industry can provide, from casting machines, tooling and furnaces to heat treatment, measurement technology and training. Stellantis alone has earmarked 702 million Euros from its latest investment for the development of local suppliers, while the share of local value creation is set to increase from 69 to 75 per cent by 2030. European industry can also compete for these opportunities – as an equipment supplier, a partner or through its own local operations.
