Chinese Firms to Establish Plant in Algeria for Car Production

In a significant move towards enhancing the local automotive industry, Chinese companies Chery, Geely, and JAC have announced plans to establish car manufacturing plants in Algeria.

This development comes at a time when the Algerian vehicle market is grappling with issues of high prices and limited availability.

This initiative aligns with an Algerian approach based on a new law that mandates a minimum local production component rate of 10%, offering tax incentives and exemptions to manufacturers.

Economic experts view the Algerian car industry as a promising investment opportunity given the rising domestic demand for vehicles.

Official data estimate the Algerian market's annual requirement to be between 250,000 and 350,000 units.

Algeria aims to revive a "genuine local automotive industry" following the failure of assembly and assembly projects launched during the presidency of former president Abdelaziz Bouteflika, which was marred by financial corruption scandals involving those in charge.

Chery's Algeria Director, Ayman Cherit, in an interview with Al-Sharq, disclosed that his company plans a $110 million investment in an Algerian-Chinese partnership to start manufacturing Chery cars locally by the end of 2024.

The initial production is expected to be 24,000 cars in the first year, aiming to reach 100,000 cars by the third year.

Cherit highlighted governmental incentives encouraging the establishment of a genuine vehicle industry through tax exemptions on imported raw materials crucial for manufacturing.

Similarly, the General Manager of the Chinese brand in Africa, Hu Shun, told Al-Sharq that the company views Algeria as a "significant market" with an "encouraging investment climate."

The company plans to invest in several Algerian cities to manufacture over 50,000 cars annually, a target to be achieved gradually, with operations starting around September or October 2024.

Geely's Deputy General Manager in Algeria, Mohamed Gherbi, revealed to Al-Sharq that his company intends to set up a $200 million car manufacturing facility in Western Algeria with an annual capacity of 50,000 cars.

The first Geely "gx3" model is slated for production in 2026, as part of a partnership between Algerian company SODIVAM and Chinese Geely.

According to the Algerian Ministry of Industry, JAC Motors, in partnership with OMEN AUTO, plans to establish a local factory to produce cars with an integration rate exceeding 30% and a maximum annual capacity of 100,000 cars in Ain Temouchent province, Western Algeria.

The exact commencement date for production has not been disclosed. Additionally, the Opel company has been granted a license to build a car manufacturing facility in Algeria, as confirmed by the ministry.