PSA Expands to North Africa with Plant in Algeria

psa_grpPSA Group has signed a joint venture with three Algerian partners to manufacture cars in the North African country. The manufacturing plant will start production next year and be fully operational in 2019, PSA said in an announcement on Sunday.

PSA did not mention which cars the factory will manufacture, however they said that the plant will build models that will “enable PSA brands to serve demand from Algerian customers.”

The agreement will drive 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 announcement. 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 approximately 100 million euros ($117 million). The Algerian partners are Condor Electronics, Palpa Pro and Enterprise Nationale de Production de Machines-Outils (PMO).

The joint venture will open the plant in the western Algerian city of Oran, where Renault opened a factory in 2014. Volkswagen Group set up a plant in Algeria in July.
Automakers are expanding production in North Africa in the hope that car sales will grow rapidly as incomes rise. Low costs and the proximity of the EU for potential exports are also attractions.