Renault will start production of its low-cost Symbol model in Algeria during the second half of 2014, from which date it will also enjoy a three-year exclusivity agreement in the country.
The deal – an investment split between the Societe Nationale de Vehicules Industriels (SNVI), Algeria’s National Investment Fund (FNI) and Renault – will see initial Symbol production – based on the latest generation Logan – with a starting capacity for all vehicles of 25,000 per year rising to a possible 75,000.
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“The agreement will start in the second semester of 2014,” a Renault spokeswoman told just-auto from Paris. “The deal will give exclusivity for Renault in the Algerian market – no other automobile maker can come in and build an assembly plant. The exclusivity period starts at the start of production.
“This deal has been under negotiation for three years [and] will create around 350 jobs in Algeria to start with.”
The factory – at Oued Tielat near the port of Oran – was chosen says Renault due to the proximity of the harbour, the road network and a qualified local labour force.
Renault’s Algerian partnership will look to mainly tap into the growing domestic market that currently stands at around 410,000 vehicles, although eventual exports to other African countries is also a possibility.
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By GlobalData“We are confident we will sell these vehicles in Algeria,” said the Renault spokeswoman. “Once things get more developed with the factory, then we can consider exporting.
Producing cars outside France is a sensitive issue for Renault’s unions and those of other domestic automakers, but the manufacturer is keen to stress it is not about replacing employment at home.
“It is the opposite of delocalisation as the French Economics Development Minister [Arnaud Montebourg] said yesterday,” said the Renault spokeswoman.
“It is a win-win partnership between Renault and Algeria. This model has never been produced in France and never will be. We can’t produce low-cost vehicles in a high-cost country – it doesn’t work economically.”
Renault chief operating officer, Euromed-Africa region, Jean-Christophe Kugler, is now travelling back to France following the inking of the deal in Algeria, while President Francois Hollande, currently on a State visit to the country, highlighted the agreement in a speech last night (20 December).
France – as the former colonial power in Algeria – has endured a rocky relationship with its Mediterranean neighbour but Paris will welcome deals such as that between Renault and SNVI to ease tensions.
“What I want to define is a strategic partnership, which will allow us to enter into a new age between France and Algeria,” Hollande said.
“There are strong announcements, for example, Renault’s decision to open a factory to build cars, not only just for Algeria, but for the whole of the Continent.”
SNVI and FNI are contributing 34% and 17% respectively, to form a 51% stake in the venture, with Renault taking the remainder.
The SNVI and Algerian Industry Ministry were not immediately available for comment.
