Algeria is expected to sign a deal with French carmaker PSA to open a plant in the North African country "this year", Algeria's prime minister said Thursday. The project with PSA, which owns the Peugeot, Citroen and DS brands, will "come into being this year", Abdelmalek Sellal said at a press conference with visiting French Prime Minister Bernard Cazeneuve.
"We are analysing the situation of the automobile industry and are conducting an audit to rebalance our projects," Sellal said, adding that Algeria hoped to produce vehicles for the local market and for possible export. The expected deal was reportedly close to having been signed already when former French premier Manuel Valls visited Algeria last year.
Once one of Africa's biggest car markets, Algeria is embarking on an ambitious programme aimed at replacing hundreds of thousands of foreign imports with domestically produced models. Sellal also said that disputes between Algeria and France's energy giants Total and Engie had been resolved, without adding any details.
Last year, Total started arbitration proceedings to contest Algeria retroactively modifying profit-sharing on oil and gas ventures in the country. Gas group Engie is looking to renegotiate its long-term contracts in Algeria. Algeria hopes to develop its domestic automobile industry to counter a sharp drop in the price of oil, its main source of revenue. The industry has been given incentives to produce more models after the government radically slashed imports.
In November last year, Volkswagen signed an agreement for the construction of a vehicle assembly plant in Algeria. Volkswagen became the second car manufacturer to establish an assembly plant in the country, after France's Renault inaugurated a multi-million-euro plant in 2014. 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.
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