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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Algeria buckles up for homegrown auto drive

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By Amal Belalloufi — Once one of Africa’s biggest car buyers, Algeria is embarking on an ambitious programme aimed at replacing hundreds of thousands of foreign imports with domestically produced models to keep drivers on the road. Facing up to a sharp drop in the price of oil — its main revenue source — the North African nation has launched a “new economic model” which seeks to reduce reliance on crude sales.


One of the ways it hopes to achieve this is by developing its domestic automotive industry, which has been given incentives to produce more models after the government radically slashed imports.


As fears grow over US President Donald Trump’s impact on global free trade, Algeria’s move towards homegrown manufacturing is a possible sign of protectionism in the country.


Algeria in 2014 was Africa’s second-largest car market in terms of sales, with more than 400,000 vehicles imported annually, but last year it cut import licences by half.


As a result, only 83,000 units were brought in, representing around $1 billion worth of sales, a sharp fall from the $7.6 billion Algeria spent on foreign cars in 2012, ministry of commerce figures show.


According to economist Abdelatif Rebah, Algeria’s reliance on foreign cars had become “unsustainable for our external balance”. Now, heartened by a similar domestic production drive in neighbouring Morocco — which has a Renault plant in Tangiers producing 200,000 models a year — Algeria is eyeing homegrown car manufacturing. The French motor giant opened a multi-million-euro plant in Paris’s former colony in 2014, with an eventual yearly output set to hit 75,000 vehicles. In November, Volkswagen signed an agreement with its Algerian sales partner for the construction of a vehicle assembly plant in Relizane, 320 km southwest of the capital Algiers.


The plant will produce several models, including the Volkswagen Golf, SEAT Ibiza and Skoda Octavia as well as the Caddy. Algeria’s industry ministry says it has another dozen such projects in the planning, but experts have expressed doubts over quality assurance. Although the percentage of car parts manufactured locally is currently negligible, the government has plans to increase that proportion to 40-50 per cent within five years. Car industry expert Reda Amrani says Algeria has an “immediate” need for 600,000 private cars and 100,000 industrial vehicles. — AFP


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