By signing, in October, a contract with the Italian firm Fiat for the construction of vehicles in Algeria, the government intends to revive a sector which has been stagnant for almost four years.
After years of fighting to regain his right to sell cars again, Abderrahmane Achaïbou finally believes he can see the end of the tunnel.
In 2015, this dealer, victim of influence peddling by businessmen close to the Bouteflika circle, had all the brands (Kia, Ford, Isuzu) he represented in Algeria withdrawn.
Once Abdelaziz Bouteflika was ousted in 2019, he had not recovered his business. Because from 2020, Abdelmadjid Tebboune, freshly elected, had decided to freeze vehicle imports.
It is with hope that he therefore welcomed, on November 17, 2022, the publication of two new executive decrees intended to relaunch the automotive market, one devoted to the concession – therefore to the import and sale of vehicles new – the other to assembly and the automotive industry.
We learn, for example, that vehicles running on diesel are now prohibited from being imported because they are too polluting, and that the warranty for cars cannot be less than five years, compared to three years previously.
It is in the aspect linked to the car assembly industry that the law signed by Prime Minister Aïmene Benabderrahmane brings something new.
Manufacturers are now obliged to export part of their locally assembled vehicles and will be required to achieve 30% integration (part manufactured locally) within five years.
In the meantime, operators wishing to get started will first have to submit their files to the Ministry of Industry, which will award them approvals.
While some professionals in the sector are already worried about “the time” that this procedure will take, given the existing bureaucratic red tape, consumer associations believe that the new decree “protects motorists”.
Shortage and soaring second-hand prices
The promulgation of these new laws comes three years after an almost total stoppage of car imports.
As soon as he came to power at the end of 2019, President Abdelmadjid Tebboune had accused car manufacturers who had set up assembly workshops of limiting themselves “to inflating tires” and declared that he wanted to set up “a real car industry”.
The Head of State had decided, in the process, to no longer authorize dealers to import new vehicles.
Consequence: this situation has created a shortage and pushed up the prices of used cars on the market. “To balance the market, we would have to import at least one million to one and a half million cars,” said Mourad Saadi, a journalist specializing in the automobile, for Middle East Eye.
A figure confirmed by Abderrahmane Achaïbou, who recalls that the Algerian market has a huge deficit of vehicles.
“Let’s not forget: the car creates jobs. However, today, in addition to individuals, it is companies and institutions that find themselves deprived of this essential tool,” he insists to MEE.
To create a “genuine automotive industry”, as President Tebboune put it, the Algerian government decided to get directly involved.
On October 13, he signed an agreement with the Italian firm Fiat for the construction of a passenger car assembly plant in Oran (west).
According to both parties’ estimates, the first cars should leave the factory by the end of 2023.
In the meantime, the Italian brand, a subsidiary of the European group Stellantis, which also includes Peugeot-Citroën and Opel, will start by importing models manufactured elsewhere, particularly in Europe.
The first approvals for the import of passenger vehicles were only given at the beginning of March. Are concerned: the Italian firm Fiat, the German Opel and the Chinese JAC. The first Fiat cars arrived on Sunday March 12 at the port of Mostaganem (west).
“That’s the right thing to do, because only manufacturers are allowed to build cars. Look at Russia! Despite technological advances, this country has called on companies like Renault to build cars”, observes Abderrahmane Achaïbou who recalls that a “dealer can only sell cars”.
Mourad Saadi believes that “it’s a good thing” that the authorities engage directly with manufacturers in “the absence of a real local industrialist” in the automotive field.
The signing of the agreement between the Algerian government and Fiat was followed by the reopening of three former assembly plants, closed in 2019: that of Renault in Oran, Hyundai in Tiaret (west) and Kia in Batna (east). .
The three units were then able to assemble cars again from the parts purchased before they were closed and stuck in different ports.
But this should not last, according to President Tebboune himself.
“The era of editing is over,” he said in December at the inauguration of the National Fair of Algiers, an event intended to promote local production.
The problem of outsourcing
From 2015 to 2019, the Algerian authorities had encouraged local investors to set up car assembly plants, in return for significant tax advantages applied to spare parts kits for CKD and SKD assembly operations (non-standard products). assembled, wholly or in part).
Apart from the French Renault, which has its own subsidiary in Algeria, several global manufacturers then installed assembly units in association with former local dealers with the aim of creating an automobile industry.
The bet is not won: all the professionals in the sector underline how creating such an industry will be complicated in the absence of a subcontracting network – for spare parts among others – able to meet the demand of factories.
As evidenced by the few companies specializing in the manufacture of plastic or glass components present at the last national production fair, this subcontracting network is not able to support a complete industry.
Automobile assembly plants have not, since their opening, been able to do anything other than assemble imported kits. Problem: the benefits granted by the state have not lowered car prices, which have, on the contrary, increased over time.
After the outbreak of the popular revolt in February 2019, all the owners of assembly factories close to the Bouteflika circle were imprisoned.
They were tried and sentenced to heavy prison terms for “embezzlement of public funds”, “fraud” and above all “capital flight”, the courts accusing them in particular of having “inflated the invoices” of parts imported to bring out a maximum of currencies abroad.
They are still in jail. Their businesses have been placed under the authority of court-appointed receivers. The new laws seek to correct these anomalies.
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