From Eastern Europe to North Africa. The Quiet Shift Reshaping European Manufacturing
Written by Kfir Kedem
European manufacturers are constantly looking for the best opportunities in terms of quality, reliability, and costs. These three pillars must be present at the heart of every long-term industrial partnership and must improve over time. In the past, this dynamic drove West European manufacturers to partner with tier suppliers in Eastern Europe and China. The COVID-19 pandemic and subsequent inflationary pressures contributed to rising wages across Europe, while recent geopolitical developments are forcing OEMs to look for opportunities outside of China.
As a result, North African countries are gaining traction as key players in European nearshoring strategies. Logistics are highly competitive, with transport possible from Morocco into Spain and then a drive away from the rest of Europe. Transit times from Morocco to Europe can be measured in days rather than weeks compared to Asia, making supply chains significantly more responsive. With most OEMs, this can be comparable in lead time to certain Eastern European suppliers depending on location and infrastructure. When it comes to sourcing from China, the distance is reduced so dramatically that lead times can decrease by several weeks.
Wages also play a major role, although differences depend on skill level and sector. Entry-level manufacturing workers in Morocco typically earn around $280 to $400 per month, while skilled technicians can reach $800 to $1,800, compared to significantly higher wage levels in Europe . Engineering roles in Morocco can earn €1,000 to €1,500 monthly versus up to €6,500 in parts of Europe, highlighting the structural wage gap . Tunisia and Egypt have similar wage ranges to Morocco.
The leading country for this European resourcing strategy is Morocco. This is specifically due to a two-decade industrial policy strategy driven at the state level under the king’s leadership. Manufacturing became a core part of the country’s development, supported by targeted investment in both infrastructure and workforce training. For example, Morocco established dedicated Automotive Industry Training Institutes (IFMIA) in key industrial hubs such as Tangier, Kenitra, and Casablanca, designed in partnership with manufacturers to provide job-ready workers . These institutes deliver training directly aligned with factory needs and have achieved employment rates of up to 95–98% for graduates, reflecting tight integration between education and industry .
As such, European manufacturers are able to access relatively low labor costs while benefiting from increasingly specialized and industry-aligned workforces, rather than purely low-cost labor. The automotive industry has also rapidly expanded in Morocco, with the country becoming a major export hub to Europe, reinforcing this positioning .
From a commercial perspective, this resourcing is highly attractive. However, it creates tension with the EU’s “Made in Europe” ambition. Rather than bringing business back into Europe and redeveloping the continent’s industrial strength and scale, some manufacturing activity is shifting to neighboring regions instead. Meanwhile, the impact is uneven across Europe, as smaller manufacturing cities often rely on a single factory for employment. In cases where production relocates, this can lead to localized job losses and economic disruption.
So in terms of supply chain benefits, it is clear: closer, faster, and cost-efficient production with competitive quality levels. But the key question remains: is the cost advantage sufficient to justify the potential impact on Europe’s domestic manufacturing base and long-term industrial strategy?
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