Algeria Welcoming European, Chinese Automakers

VIENNA – Algeria is gearing up to join the ranks of car-producing countries.

In contrast to other North African countries such as Egypt and Morocco, only commercial vehicles now are built in Algeria.

The state-owned SNVI produces trucks and buses mainly destined for the Algerian market. However, the local car market has enjoyed strong growth in recent years, making the country more attractive to global car makers.

Last year 424,972 cars and light-commercial vehicles were sold in Algeria. Peugeot was No.1 with 74,350 deliveries, followed by Renault with 74,088 and Renault’s Dacia Romanian brand with 37,290.

Renault Group was the largest player in Algeria with 111,378 deliveries and 26.2% market share.

Renault also is the first company to make cars in the country. Construction of the Oued Tlelat plant southwest of Oran started last September. The facility is to begin assembling Renault Symbol sedans in November.

According to the shareholder agreement signed between Renault, SNVI and the country’s National Investment Fund, the new company – Renault Algerie Production – is a joint venture owned 51% by the Algerian partners and 49% by the French automaker.

The plant’s annual production volume will start at 25,000 units and can be increased to 75,000 based on market response. Other models are expected to be added. Plans also call for the use of locally manufactured components.

Following Renault, Daimler’s Mercedes-Benz brand will be assembled in Algeria, and SNVI also is a partner in that project.

Last fall Daimler signed an agreement with its Algerian partners, including SNVI and shareholder Aabar Investments from Abu Dhabi, regarding assembly of the Mercedes G-Class and several commercial vehicles in Algeria.

Plans call for CKD assembly of the G-Class in Ain Bouchekif near Tiaret from kits sourced from the Magna Steyr Fahrzeugtechnik in Graz, Austria. Sprinter commercial vans also will be assembled at the site.

The exact time schedule and volume plans are not known yet. The agreement says only that up to 8,000 vehicles are to be assembled in Ain Bouchekif annually.

The contract between Daimler and its partners includes the establishment of three joint ventures. In addition to the G-Class and Sprinter JV, another company is scheduled to assemble up to 15,000 Mercedes-Benz trucks and buses a year in Rouiba. A third plant in Oued Hamimine will build engines. Production launches this year.

Daimler will not be a shareholder in the Algerian JVs, instead acting only as grantor of licenses and technology supplier.

The growing Algerian market also is luring Chinese manufacturers offering several car and CV brands.

Chinese automaker FAW and the Arcofina Group, Algeria’s importer of FAW cars, plan a JV for car assembly. The plant, to be owned 51% by Arcofina and 49% by FAW, is expected to have an initial annual output of 10,000 units with up to 30,000 a year to be made in the future.

In addition to assembly of cars destined for the Algerian market, plans also call for exports mainly to other North African markets and some European countries.