Algeria Launches New Fiat Plant, Aims to Boost Automotive Sector and Rival Morocco

Algeria wants to compete with regional countries, including Morocco, in the automotive sector. In this sense, a new Fiat plant has been established in Oran, in the west of the country, at a cost of 200 million euros "to show the possibilities that Algeria can offer to foreign investors," says Atalayar. This assembly plant "was completed in a record time of one year, with a production capacity of 90,000 cars per year," said Carlos Tavarez, the CEO of Stellantis - Fiat’s parent company. The plant "will start producing 50,000 cars per year, to reach 80,000 cars in 2026," said Ali Aoun, the Algerian Minister of Industry.

In Algeria, the automotive sector has been hit hard by President Abdelmajdid Tebboune’s decision to close factories because "they were content to put on wheels," in exchange for significant tax advantages. He had also ordered to stop importing a large volume of vehicles. This decision had a negative impact on companies like Nissan, which announced in 2019 the establishment of a plant in Algeria at a cost of around 160 million euros. The length of bureaucratic procedures, the lack of guarantees in terms of legal rights are the other factors that have slowed the growth of the automotive industry in Algeria.

Today, Algeria wants to adopt a new strategy to revitalize the sector. But it will have a hard time competing with regional countries like Morocco, the largest automotive production center in Africa, which has become the leader in the automotive sector in the North Africa and Maghreb region. The kingdom now has more than 250 automotive suppliers, many of which are subsidiaries of foreign companies, employing some 220,000 people. According to data from the Foreign Exchange Office, the Moroccan automotive sector has seen a strong growth in its exports, reaching nearly 116.38 billion dirhams at the end of October 2023, an increase of 30.5% compared to the same period the previous year.