An IPO allows a company to sell its shares on a specific stock exchange. Companies raise capital through their IPO to invest in their operations. Founded in 2017, Moroccan company Neo Motors currently produces 3,000 units a year of its first model, a three-door sedan that sells for $20,000.
According to a Bloomberg report, the model will compete with Renault SA's Dacia brand, as well as petrol vehicles from Chinese brands. The carmaker's ambition is to reach a production capacity of 15,000 cars a year within three years and expand its range of electric vehicles, CEO Nassim Belkhayat told Bloomberg.
The Moroccan carmaker is in talks with the African Development Bank about new financing options, Belkhayat said. Neo's IPO is a new milestone for Morocco's fast-growing automotive industry. Morocco has been implementing policies and investing in major infrastructure projects for decades to transform the country into a regional manufacturing hub.
By virtue of its proximity to Europe, the North African country has attracted some of the biggest names in the automotive industry, including Stellantis NV Peugeot and Renault. The government is now concentrating on accelerating domestic industrial integration through local production of key components. Amid the COVID-19 pandemic, Neo Motors secured a loan from a Moroccan bank to finance a $4.9 million (Dh50 million) investment in its plant in Ain Aouda, on the outskirts of Rabat.
Bloomberg reports that the success of the Neo plant has been further accelerated by Peugeot's decision to produce engines at the new Kenitra plant. Peugeot's factory supplied Neo with competitively priced local parts that automakers had previously been forced to import.
The vehicles are hand-assembled at Neo Motors' 5,000-square-metre, 2-hectare industrial facility in Ain Aouda (Rabat region). The first model is a crossover. A three-door urban SUV, a comfortable and reliable model. Prices range from 165,000 to 195,000 DH depending on the engine (3-cylinder, 82 hp).
"Although the price may seem affordable, it is twice as much as at the beginning of the project," explains Nasim Belkhayat. The car, which is part of the company's name, is affordable and offers "excellent value for money".
"We wanted to build a car for people, like Volkswagen did 100 years ago," said Belkhayat. "We built the body, frame and wiring ourselves and outsourced the rest to 43 local suppliers," he added. The auto industry is "cash-starved", he said. "That's why it is clear that one of our goals is to list on the Casablanca Stock Exchange".