Renault to set up factory in Algeria

renault  David Villarreal FernándezThe Renault factory in Algeria is expected to have an annual output of 25,000 units. (Image source: David Villarreal Fernández/Flickr)French car-manufacturer Renault is set to sign a pact with the Algerian government ahead of building its first manufacturing plant in the country

The pact signing ceremony has been scheduled take place later this week during a visit by French President Francois Hollande to the former French colony, a Renault spokesperson said.

According to conditions of the agreement, the country will hold 51 per cent of the installation, while 49 per cent will be owned by the French manufacturer. The factory will be located at Oran.

The spokeswoman added that the completion of the factory has been scheduled for 2014 and once operational, the factory will have an annual output of 25,000 units, which it will eventually ramp up to a maximum capacity of 75,000 units.

Cars assembled at the factory will be based on the Renault Symbol model, a second generation model of the Logan series.

A statement from Renault revealed that, with the company’s European sales declining rapidly, it was focusing on expanding outside the European market and hence the push for a stable foothold on the African continent.

It added, “With Renault accounting for one quarter of cars sold in Algeria, its prospects for success in the country are substantial, and Algeria may prove an appropriate starting block for the company’s African expansion.  Estimates suggest that at its best, the Algerian market sees 450,000 vehicle sales per year.”

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