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Michelin Struggles in Algeria: Heading for Market Exit?

Tire manufacturer Michelin is facing significant hurdles in continuing its operations in Algeria. According to reports by TSA, the French group is struggling to obtain the necessary import permits, a situation that could jeopardize its future in the Algerian market.

A Strategy No Longer Aligned with Algerian Economic Policy

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Since ceasing local production in 2013, Michelin has been limited to selling tires manufactured abroad. However, this approach no longer aligns with Algeria’s new economic directions, which emphasize the revival of national production and reducing import dependency. The Algerian government now favors companies willing to invest locally and contribute to the country’s industrial development.

In this context, Michelin appears to be out of sync with Algeria’s policy, casting doubt on the sustainability of its operations in the region.

An Unfavorable Economic and Political Climate

Beyond commercial restrictions in Algeria, Michelin is navigating through tough times in France. In 2024, the company announced the closure of two factories in France, citing insufficient profitability due to Asian, particularly Chinese, competition and high energy costs. This restructuring reflects the challenges in the European tire market and could influence Michelin’s decisions regarding its international operations.

Moreover, relations between Algiers and Paris have significantly deteriorated in recent years. France’s recognition of Moroccan sovereignty over Western Sahara in 2024 has exacerbated diplomatic tensions, impacting economic exchanges between the two nations. French companies in Algeria now must operate in a more complex environment where political decisions can directly affect their business.

What Future for Michelin in Algeria?

Faced with these challenges, Michelin must either adapt to Algeria’s new requirements by investing in local production or consider a gradual market exit. In a context where Algeria aims to strengthen its national industry and diversify its economic partnerships, the French group might see its position weakened in favor of other international players more willing to meet Algiers’ expectations.

Michelin’s fate in Algeria will thus depend on its ability to revise its strategy and align with the country’s new economic priorities. A complex equation in an increasingly uncertain climate for foreign companies operating in the Algerian market.

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