Algeria, November 13, 2017

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PSA launches joint venture to build cars in Algeria

PSA Group has signed a joint venture with three Algerian partners to build cars in the North African country.

A new plant will start some production next year and be fully operational in 2019, PSA said in a statement on Sunday.

PSA did not say which cars the factory will build, stating only that the plant will manufacture models that will 'enable PSA brands to serve demand from Algerian customers.'

The agreement will help PSA to achieve its goal of selling 700,000 vehicles in the Middle East and Africa region by 2021, PSA's regional boss, Jean-Christophe Quemard, said in the statement. PSA said it sold 383,504 vehicles in the region in 2016.

PSA said it would hold 49 percent of the joint venture's capital, representing a total investment of around 100 million euros ($117 million). The Algerian partners are Condor Electronics, Palpa Pro and Entreprise Nationale de Production de Machines-Outils (PMO).

The joint venture will set up the plant in the western Algerian city of Oran, where Renault opened a factory in 2014. Volkswagen Group opened a plant in Algeria in July.

Automakers are increasing production in North Africa in the expectation that car sales will grow rapidly as incomes rise. Low costs and the proximity of the EU for potential exports are also attractions.

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