Volkswagen may be reluctant to invest in Algeria

European manufacturers facing difficult conditions at home are anxious to increase their share of the booming North African market for cars. To do this they need to establish manufacturing plants in North Africa to ensure volume sales. Renault, which has its manufacturing plant in Tangiers, has been negotiating with the Algerian government to set up a plant in Algiers but the talks are going slowly due to arguments over location of the factory site and Algeria’s policy of insisting on 49/51 majority Algerian state ownership which remains unattractive to international investors.
 
Volkeswagen proposed to the Algerian government according to Echouorouk that it commenced with  70 thousand cars dedicated for the domestic market, as a first step, then 100 thousand cars per year during the second phase. The third phase would be exporting to African and Arab markets.
 
 The pressure on automobile manufacturers in Europe where the market for medium range cars is faltering to find new markets as witnessed by Peugeot PSAs closure and redundancy plans  in France is intensifying. The North African market for medium range and smaller vehicles remains extremely healthy.