The dotted future of Renault’s plant in Algiers

Clouds continue to cover the sky over the Algerian car market. Just a year ago, in May 2021, French manufacturer Renault’s car assembly plant in Algiers partially resumed operations after 16 months of inactivity due to a shortage of CKD/SKD kits.

The return followed customs clearance a month earlier of part of the assembly kits that were in the port of Oran.

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A “gradual” and “temporary” recovery, Renault Algeria sources told TSA. Renault’s plant in Oued Tlelat (Oran), commissioned in 2014, closed in January 2020 following a government decision to ban imports of SKD/CKD kits and cancel tax breaks granted to well-known car manufacturers in Algeria. This year, after the war in Ukraine, the French manufacturer finally stopped production in Russia.

Specialized site L’Argus reported on Wednesday, May 11, that the Algerian factory of the diamond brand will also face “problems”. Renault’s Algiers plant, located in Oued Tlelat, near Oran, assembled the Renault Symbol, Renault Clio and Dacia Stepway.

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L’Argus, citing the latest monthly analysis from automotive specialist Inovev, hypothesizes that Renault “may sell its Algiers plant.”

In its analysis, Inovev notes that Renault’s Oran plant is “well off the manufacturer’s targets as it no longer manages to get close to its 75,000 vehicle-a-year production target based on the response to local demand that has suffered. at the time of the termination of the import of cars.

According to data released by Inovev, the plant failed to reach 73,000 vehicles in four fiscal years. According to the same source, Renault Algeria assembled 19,419 vehicles in 2015, followed by 42,036 units in 2016, 60,646 units in 2017 and 72,615 units in 2018.

A “regular ramp-up” that projected an annual production of 75,000 units per year but which was “violently halted,” the firm points out, citing the health crisis and the blocking of SKD/CKD imports, among other things. The “disintegration” of production is reflected in the figures that Inovev received from Renault.

Collapse in production

The firm clarified that in 2020, Renault in Algeria assembled just 754 vehicles (173 Logan/Symbol 2, 354 Sandero 2 and 227 Clio 4) due to a plant closure for more than a year.

According to Ivonev, after the gradual resumption of activities in May 2021, the Oran plant “in total last year assembled 5,208 vehicles (1,148 Logan, 2,808 Sandero and 1,252 Clio), i.e. twelve times less than in 2019 (60,012 units).” .

As for the forecasts for the period 2022-2030, they are “very uncertain, and there is no certainty that Renault will keep this plant,” says Inoviev. And to emphasize that “difficulties arise from the assembly of vehicles with too low a degree of integration”, which the Algerian government calls “imports in disguise”.

The French manufacturer, “which has always favored its Tangier site in Morocco, may have misunderstood the attitude of the Algerian government towards its Oran ‘screwdriver’ plant,” notes the firm, noting that the 2021 Dacia Logan from the Oran plant to the factory in Tangier, Morocco.

“He (Renault) believes that the gap between the growing Moroccan plant (capacity is 350,000 units) and the Oran site is such that the sustainability of the latter is being called into question. More than ever, analyzes Ivonev, who adds: “The topic of Algeria is not new for Renault, but the interest in keeping this plant is emerging in a context where the manufacturer is looking to refinance.”

Reno denies

However, the French manufacturer, contacted by L’Argus, denies any intention to close its plant in Oran and leave Algeria, according to the hypothesis put forward by Inovev, while confirming that the volumes collected are “still very small.”

“The situation has been going on for some time (…) but by no means have we announced that we are going to leave Algeria, which remains an important market for Renault,” said Renault L’Argus. The magazine reports that the French group “continues to discuss with the Algerian government the possibility of rectifying this situation.”