On August 25, 2024, the Chinese ambassador to Algeria, Li Jian, revealed an important piece of information in a written interview with the local media, Le Messager:
Chinese automotive companies such as JAC, Chery, Geely and others plan to introduce advanced technologies in Algeria and carry out localized production, and their products will not only be sold locally in Algeria, but also exported to third countries.
Behind this news is Algeria’s ambitious vision to restart its auto manufacturing industry, inspired by the growth of neighboring Morocco’s automotive industry, which has already attracted the attention of many international automakers, including these Chinese automakers.
This article is the eighth in a series of “Algeria Business” articles by the China-Algeria Industrial Research Institute (CAIRI), which provides an in-depth introduction to industrial policies, laws and regulations, industry trends, market demand, competitive landscape and potential deal opportunities in China-Algeria investment, trade and engineering construction sectors.
Although JAC, Chery and Geely have yet to obtain manufacturing licenses, their investment and market trends in Algeria have attracted widespread attention.
We will delve into the investment information and leads of these three Chinese automakers in Algeria, and how the increasingly close economic and trade exchanges between China and Algeria have laid a solid foundation for the Chinese auto industry to enter the Algerian market.
JAC’s New Layout in North Africa
On January 7, 2016, a signing ceremony was held in the Algerian capital for the KD plant of Algerian light trucks, which is a cooperation between JAC and local dealers.
This is the first time for JAC to disclose the official landing of its first light truck KD plant in the African continent, which is expected to bring new vitality to the automobile market in the region.
According to JAC’s official introduction, the KD plant is expected to have a first-phase capacity of 10,000 units/year, and will mainly produce new-generation light trucks and small trucks to meet the requirements of new regulations in Algeria.
These new products will be safer and more energy-efficient, aiming to meet the local market’s demand for high-quality light trucks.
Since 2011, JAC has become the leader in Algeria’s light truck market, ranking first in market share and first in terminal sales among Chinese auto brands.
According to statistics, JAC exports more than 6,000 light trucks to Algeria every year.
By the end of 2016, JAC has obtained access certification for 14 products in the Algerian market, covering N721 wide-body and narrow-body light trucks, high-end small truck series, as well as a variety of models such as refrigerated trucks, vans and dump trucks.
However, although the signing ceremony of the KD plant has been held, more details about the actual operation of the plant have not been disclosed. According to some sources, the KD plant has not yet been officially put into production.
This means that JAC’s KD plant project in Algeria may still be in the preparatory or preliminary construction stage, and this signing ceremony may mark the official launch of the project.
This time, the Chinese ambassador reconfirmed the news of JAC’s market layout in Algeria, indicating that JAC’s local plant’s production and operation will further move towards reality.
Chery accelerates its entry into the Algerian market
In November 2023, the Algerian news agency published a report titled “Chinese car brand Chery starts selling in Algerian market”, revealing the latest market movement of Chery in the country.
According to the report, Algeria’s Minister of Industry and Pharmacy said that Chery Automobile will operate in 30 provinces across Algeria and offer seven different models to consumers.
Not only that, but Chery Automobile Co. also plans to build a brand new car manufacturing plant in Bordj Bou Arreridj with its Algerian partners.
This plant is expected to have an annual capacity of 24,000 vehicles. Chery said that they will gradually increase the production capacity of this plant over the next three years, with the goal of increasing it to 100,000 vehicles per year.
It is worth noting that the new plant will not only meet the needs of the Algerian domestic market, but also take on the task of exporting cars to other North African countries, further expanding Chery’s market share in the North African region.
Looking back at history, Chery’s layout in Algeria has long been underway.
According to previous reports, in February 2018, the “Chery Algeria plant KD production line shipping ceremony” was held in Wuhu, Anhui Province, China, marking the official opening of the road of assembly and production of China’s own brand of automobiles in Algeria.
Compared with the KD assembly plant at that time, the production scale of the rumored new plant will undoubtedly be even larger.
Geely Automobile proposes to invest $200 million to build a plant
At the end of 2023, Geely Automobile Algeria’s Deputy General Manager Mohamed Gharbi revealed in an interview with local media Al-Sharq (Kada Orient) that Geely Automobile plans to build a brand-new automobile factory in western Algeria, with an estimated investment amount of $200 million, and that the factory’s annual production capacity will reach 50,000 vehicles.
According to Mohamed Gharbi, the establishment of this new plant will be predicated on the production of Geely’s first model, the Geely GX3, or Geely Vision X3.
He revealed that the official production of this model will begin in 2026 under the terms of a bilateral partnership between the Algerian automobile company Sodivam and Geely.
This means that the Geely Algeria plant will be officially operational in 2026 and its initial production capacity will soon reach 50,000 units per year.
It is worth mentioning that by the end of 2023, Geely had successfully opened the channel for exporting complete vehicles to Algeria and obtained the qualification for exporting complete vehicles to Algeria. This qualification has undoubtedly laid a solid foundation for Geely’s further expansion in the Algerian market.
Geely’s performance in the global market in recent years has become more and more eye-catching, and its layout in the Algerian market also appears to be particularly active. The investment of $200 million in the construction of a new plant further demonstrates its competitiveness in the North African market.
Economic and Trade Exchanges between China and Algeria
During the interview, Chinese Ambassador to Algeria Li Jian also introduced the rapid development of economic and trade exchanges between China and Algeria.
Since 2013, China has been Algeria’s number one trading partner and number one source of imports for ten consecutive years, highlighting the closeness of the economic and trade relations between the two countries.
In 2023, China-Algeria trade volume made a historic breakthrough, exceeding $10 billion for the first time, a milestone achievement that further consolidates the cooperative relationship between the two sides in the economic field.
As the largest contributor to Algeria’s infrastructure development, Chinese companies have completed a number of landmark projects, including the East-West Highway, Algiers International Airport, the International Convention Center, the Grand Mosque, and the Oran Stadium, injecting a strong impetus to Algeria’s economic development.
Meanwhile, China is also an important source of foreign investment in Algeria.
So far, China’s investment in Algeria has totaled more than 2 billion U.S. dollars, and the investment fields are mainly concentrated in oil and gas, building materials, light manufacturing and so on.
These investments have not only promoted the development of related industries in Algeria, but also created more local employment opportunities and economic growth points.
Since the introduction of Algeria’s new investment law, Algeria’s business environment has been continuously optimized, providing more convenience and broader cooperation space for investors from all countries, including China.
In 2023, China’s direct investment in Algeria added more than 70 million U.S. dollars, a year-on-year increase of up to 86%, showing the confidence and expectation of Chinese enterprises in the Algerian market.
Against this backdrop, a number of Chinese automotive companies such as JAC, Chery and Geely, as well as home appliance companies Hisense, Haier and Midea, are actively going through the investment procedures, planning to introduce advanced technology and localized production in Algeria.
The localized production of these products will not only meet the needs of the local market in Algeria, but will also be further exported to third countries, expanding a broader market space.
In addition, the high-tech field is gradually becoming a new highlight of Sino-Algerian cooperation. The two sides have great potential for cooperation in the fields of digitization, artificial intelligence, modern agriculture, smart cities, circular economy, etc. The prospects are very broad.
Cooperation in these emerging fields will inject new vitality into China-Algeria economic and trade relations and push cooperation between the two sides in the economic field to a higher level.
The increasingly close economic and trade exchanges between China and Algeria have laid a solid foundation for Chinese automobile and other industries to enter the Algerian market. In the future, with the deepening and expanding cooperation between the two sides, China-Algeria economic and trade relations are expected to usher in a brighter development prospect.
