Algeria’s automotive industry is ostensibly moving cautiously, but it’s actually on a solid footing.After several years of stalemate, the country hopes to get the automotive sector back on track on the basis of a solid, long-term industrial foundation.
In December 2023, the Fiat plant in Ollantavrai goes into production, and 2025 and the coming years will be promising for the automotive industry with the arrival of several manufacturers, many of them Chinese.
Here’s a look at what some of the Chinese car brands set to move into Algeria are really worth.
Chery’s arrival in France “deserves serious consideration.”
The Algerian national daily El Watan reported on Wednesday, May 7, that Zhang Guiping, chief executive officer of Chinese automaker Chery, recently said the company is preparing to put cars into production in Algeria.
He emphasized that the car production equipment is ready to be transferred to Algeria in order to start production effectively, explaining that the start of the Chery plant now depends on the Algerian authorities giving the green light.
In addition to Algeria, Chery is also targeting the French market. The Chinese manufacturer is actively recruiting teams for its operations in France, Challenge magazine reported on Friday, May 9th.
The French business magazine called Chery Automobile “one of the heavyweights” in the Chinese automotive industry and argued that Chery’s arrival in France should be taken seriously.
In terms of numbers, Chery will produce no less than 2.6 million vehicles in 2024, making it the third largest Chinese manufacturer in the world behind BYD (4.3 million) and Geely (3.3 million).He emphasized that the car production equipment is ready to be transferred to Algeria in order to start production effectively, explaining that the start of the Chery plant now depends on the Algerian authorities giving the green light.
In addition to Algeria, Chery is also targeting the French market. The Chinese manufacturer is actively recruiting teams for its operations in France, Challenge magazine reported on Friday, May 9th.
The French business magazine called Chery Automobile “one of the heavyweights” in the Chinese automotive industry and argued that Chery’s arrival in France should be taken seriously.
In terms of numbers, Chery will produce no less than 2.6 million vehicles in 2024, making it the third largest Chinese manufacturer in the world behind BYD (4.3 million) and Geely (3.3 million).
Jetway plans to launch its models in several European countries this year
The Chinese manufacturer signed a joint venture agreement with Spanish electric vehicle company (EV Motors) in April 2024 and has already produced its first models at its plant in Barcelona, Spain.These are two SUV (Sports Utility Vehicle) models, one combustion and the other hybrid.
Jetway, a brand launched by Chery in 2018, will also launch an automotive manufacturing plant at the former Kia assembly plant in Batna, Algeria, with the first car scheduled to roll off the assembly line in December of this year.
The manufacturer also plans to launch its models in several competitive European countries as early as this year, with plans to cover most of Europe by 2027.
Jetway offers a range of SUVs and crossovers as well as pickup trucks with plug-in hybrid and non-hybrid internal combustion engines.The brand also plans to launch its first all-electric vehicle by the end of 2026.
More than three years ago, the Great Wall began its adventure in Europe.
In April, the Chinese manufacturer Great Wall Motor (GWM) announced the start of construction of a new car factory in the town of Aïn Defla, west of Algiers.The first cars from the plant are scheduled to go into production next year.
In Europe, like other Chinese manufacturers, GAC Geo started its own adventure more than three years ago, focusing especially on electric cars and top-of-the-line plug-in hybrids.
However, the manufacturer struggled at the beginning.As a result, Great Wall Motors has decided to revise its European strategy, as reported by specialized media Automobile Propre last December.Now, the company will focus on economical hybrid models under the Haval brand.
After more than four years of prolonged shutdowns at its plant in Oued Chaaba, Patna province, Chinese automaker Bayak is also preparing to return to the plant for vehicle assembly.
The Beijing-based manufacturer, considered to be one of China’s largest automakers, is set to take root in France through its Beijing brand by the end of 2024.At the beginning of the same year, Byker also launched its Arcfox brand in Spain.
Through its Arcfox subsidiary, Baic plans to import between 5,000 and 8,000 units to Spain by 2025.In terms of numbers, the Chinese manufacturer will produce no less than 1.7 million vehicles in 2023, making it one of the heavyweights in the local market.
Under the dual opportunities of the wave of industrialization in Africa and the new energy transformation in Europe, Algeria is becoming a strategic pivot point for the global layout of Chinese car companies.
🔹 The value of the springboard is obvious: Algeria has the dual attributes of “gateway to Africa” and “outpost of Europe”, where Chinese automakers can avoid EU tariffs (up to 10%) through localized production, and at the same time radiate the African market with a population of 600 million.Chery’s Batna plant is just three days by sea from Spain.
🔹Industrial policy dividend: The Al government has implemented the “market for technology” strategy, which requires the localization rate of foreign-funded car companies to reach 40% within three years, which creates a structural advantage for Chinese companies that have already mastered the complete supply chain.The restarting of the former Kia plant by Jetway is a good example of policy arbitrage.
🔹 S taggered competition on the new energy track: Facing Europe’s tough emissions regulations, Great Wall has turned to an economical hybrid strategy, while BAIC’s new energy brand, Arcfox, has cut its way into Spain with a high-end positioning, demonstrating the wisdom of Chinese automakers’ differentiation and breakout in Europe.
【投资建议】
🟡Localization and deepening: Priority is given to areas with an industrial base (e.g. Oran, Batna), and the use of existing unused plants for renovation can shorten the start-up cycle.It is recommended to set up joint ventures with local consortiums to reduce policy risks.
🔵 New energy product matrix: In view of the abundant sunshine in Algeria (3,000+ hours of sunshine per year), develop models adapted to solar charging technology.We can learn from the “vehicle + optical storage and charging” integration model of GAC EAN.
🟢 Vertical Integration of Supply Chain: It is recommended that head enterprises take the lead in establishing an auto parts industrial park in North Africa to turn local resources such as tires (Algeria has the second largest rubber production in Africa) and aluminum alloys (the world’s fifth-largest bauxite reserves) into cost advantages.
When the European market is half-open to Chinese automobile enterprises, Algeria is like a springboard, which not only tests the endurance of enterprises’ localization and rooting, but also breeds infinite possibilities to move upstream to the global value chain.The layout at this moment is the strategic opportunity to pry the global market with Africa as the fulcrum.
Article source: Meet North Africa
