French Economic Redevelopment Minister, Arnaud Montebourg, has welcomed this week’s agreement between Renault and Algeria to produce vehicles, while also seeking to reassure unions of continued domestic work.

The deal will see Renault and Algeria’s Entreprise Nationale Des Vehicules Industriels (SNVI), in collaboration with the country’s Fonds National d’investissement (FNI), produce vehicles in the country from 2014.

The Renault announcement also formed an important part of the State visit to Algeria by French President, Francois Hollande, who highlighted the importance of building bridges with Algeria some 50 years after the end of French colonial rule over its southerly neighbour.

“It [agreement] will allow the building of an assembly plant in Algeria, confirming Renault on the strongly-growing Algerian market,” said a statement from Montebourg’s office in Paris.

“These models will be produced and sold in Algeria but in a secondary move, can conquer emerging markets outside Europe, notably in Africa. Moreover, this partnership represents an important source of growth for French contractors.

“In effect, Renault is committed to maintaining part of the vehicle produced in France, while at the same time, integrating a local element to develop the automobile industry in Algeria.”

The Economic Redevelopment Minister added the deal was the “first act” of cementing industrial links between Algeria and France noting it was “excellent news” for the French car industry.

Those words will go some way to reassuring Renault’s four powerful unions, as well as those of other French automakers and suppliers.

There has been much discussion in France surrounding so-called delocalisation of industry moving out of high-cost domestic production to cheaper overseas manufacture.

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 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.

“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.”