PSA Peugeot Citroën and PAN Nigeria Limited have signed an assembly and sale of cars agreement in Nigeria.

The first vehicle earmarked for assembly under the agreement will be the Peugeot 301. Assembly operations for the 301 are planned for start in the second half of 2014 at the Kaduna plant.

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Under the terms of the agreement, PAN Nigeria Limited will also be able to assemble the Peugeot 508 and the Peugeot 308.

Peugeot says it will leverage a network of roughly a dozen dealers that will be capable of “rapidly implementing the quality standards required by the brand and supporting its business growth in Nigeria”.

The agreement is aligned with the new automotive industry development policy established by the Nigerian government.

Nigeria is seen as a country with good prospects for future automotive market growth. The annual new vehicle market is currently around just 50,000 units, suggesting plenty of upside potential. In Africa’s region, it lags South Africa which has an established market (650,000 vehicles sold in South Africa in 2013) and vehicle manufacturing sector (albeit one that is currently subject to industrial action).

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However, Nigeria is Africa’s most populous nation with about 170m people, and has its largest economy with an estimated GDP of EUR372bn in 2013 and growth of 7.4% forecast for 2014.

Commenting on the signature of this new agreement, Jean-Christophe Quémard, Operations Director, Africa-Middle East said: “This assembly agreement perfectly illustrates what the group aims to achieve with its new region-based organisation. As announced in the “Back in the Race” strategic plan, we are going to focus more on growth markets. The assembly of the Peugeot 301 in Nigeria, a growth pillar in Africa, will enable the group to take full advantage of growth opportunities in the market.”

Earlier this year, Nissan commenced vehicle assembly operations in Nigeria with the Nissan Patrol model.