Morocco's first automaker plans IPO to expand into EV production

Moroccan automaker Neo Motors, which begins selling the nation’s first homegrown automobile this month, is targeting a listing on the kingdom’s main stock exchange to expand into electric-vehicle production.

Neo, co-founded in 2017 by Morocco’s now-communications and culture minister, is initially assembling 3,000 units a year of its debut vehicle — a three-door passenger model that retails for $20,000 and competes with similarly priced combustion cars from Renault-owned Dacia and Chinese brands.

The automaker wants to ramp that up to an annual 15,000 vehicles within three years and introduce electric models, CEO Nassim Belkhayat told Bloomberg in an interview in Marrakech. Neo is in talks with the African Development Bank on further financing options, he said.

Neo’s plans would be another advance for Morocco’s car industry, a sector the government has cultivated as part of a broader drive to turn the North African nation on Europe’s doorstep into a manufacturing and trade hub open to both the West and China.

Peugeot and Renault vehicles are already assembled there, with authorities now focusing on adding value by making key components locally.

Morocco, home to about 37 million people, has just 4.3 million registered cars and sees about 175,000 sales of new vehicles each year, according to local retailers and industry group Aivam.

An EV from Neo would mirror similar initiatives across the broader Middle East, from Egypt to Saudi Arabia and Turkey.

Neo got a major publicity boost when King Mohammed VI met its leaders earlier this year. It had secured loans from Moroccan banks during the coronavirus pandemic to help fund a 50 million-dirham ($4.9 million) investment in its plant in Ain Aouda, near the capital, Rabat.

The project moved ahead when Peugeot started making engines at its new Kenitra plant, providing a competitively priced local component that automakers previously had to import.

“We wanted to make a car for the people, just like Volkswagen did a century ago,” Belkhayat said. “We made our own body, our own frame and electric cables system and source the rest to 43 local suppliers.”

The car industry is “cash-hungry,” he said. “So naturally a listing on the Casablanca stock to exchange is among our targets.”