The Ministry of Industry of Algeria has informed that Hyundai Motor has received approval to set up a factory in the country.The Minister of Industry, Sifi Ghrieb, received a high-level Omani delegation from Sarl Hyundai Motors Manufacturing Algeria, and the two sides held in-depth discussions on launching as soon as possible the Hyundai plant project, aimed at realizing the manufacturing of cars in Algeria.This initiative underscores the shared vision of Algeria and Oman to deepen their industrial partnership.
The Algerian Ministry of Industry stated that the Hyundai brand was granted preliminary approval for automobile manufacturing, a decision that is part of Executive Decree No. 22-384, which regulates the conditions and procedures for automobile manufacturing activities and is a key milestone in the advancement of the project.
The meeting followed the instructions of the President of Algeria and was aimed at implementing the agreements reached during his visit to Oman in the industrial sector.The President attached great importance to the implementation of investment projects with Oman, including modern factories.Earlier, during the Council of Ministers, the President had emphasized the need to focus on relevant projects and had also ordered the preparation of a working meeting with Slovenia focusing on the pharmaceutical, scientific research and artificial intelligence sectors.
In the area of international cooperation, Algeria is actively exploring the establishment of a direct maritime route with Slovenia in order to strengthen trade and logistical exchanges; with Oman, it plans to create a shipping company and open a connecting route, and is also accelerating cooperation projects in the areas of agriculture and the automobile industry.A series of presidential directives demonstrated Algeria’s determination to consolidate international partnerships and accelerate economic development through concrete projects.
Algeria’s automotive industry welcomes new players, how can Chinese companies take advantage of the situation to break through?
Algerian Market Trends: Policy Dividends and Strategic Upgrades
Algeria has been vigorously promoting its “import substitution” strategy in recent years, regulating access to automobile manufacturing through Executive Decree No. 22-384, with the aim of attracting foreign investment for localized production.The approval of Hyundai is a key step in this policy.President Abdelmadjid Tebboune even listed automobile manufacturing as a core area of cooperation with Oman, Slovenia and other countries, showing the government’s determination to promote industrial upgrading.
In addition to the automobile industry, Algeria is laying out international cooperation on multiple fronts: exploring pharmaceuticals, AI and direct shipping with Slovenia, establishing a shipping company with Oman, and expanding agricultural cooperation.This series of actions shows that the country is seeking economic transformation by breaking its traditional energy dependence through the strategy of “industrial diversification + regional connectivity”.
Opportunity #1: Market Positioning under Policy Dividend
Algeria’s auto market size is about 300,000 units/year, but there is a serious shortage of local production capacity, and it has long relied on imports (Chinese automakers account for more than 40% of its import share).With the entry of Hyundai, localized production will reshape the competitive landscape.If Chinese car companies seize the policy window, through joint ventures or technical cooperation to enter, can avoid high tariff barriers (vehicle import tax of 60%), to seize market share.For example, Chery, Great Wall and other brands have laid out KD assembly plants in many countries in Africa, Algeria may be able to replicate this model.
Opportunity 2: Blue Ocean Areas for Cross-Border Collaboration
In addition to automobile manufacturing, Algeria is in urgent need of logistics, new energy, digital economy and other areas; logistics infrastructure: the government plans to build a shipping company with Oman, Chinese companies can participate in the construction of ports or the provision of ship equipment; green energy: the country’s goal is to 2030 renewable energy accounted for 30%, photovoltaic, energy storage projects have great potential; digital transformation: Slovenia’s cooperation in the field of AI, biomedicine, and the ” Digital Silk Road” initiative with China is highly compatible.The digital transformation: Slovenia’s cooperation in the fields of AI and biomedicine is highly compatible with China’s “Digital Silk Road” initiative.
Challenge: Localization and Compliance Risks
Algeria’s foreign investment policy is “two-sided”: on the one hand, it offers tax incentives (e.g., a five-year tax holiday), while on the other hand, it requires foreign joint ventures with a minimum of 51% local ownership.In addition, the government strictly controls the outflow of foreign exchange, and needs to carefully design the profit return mechanism.Chinese companies need to strengthen the localization of operational capacity, to avoid repeating the withdrawal of some Western companies due to compliance issues.
The approval of Hyundai Motor is not only a milestone for Algeria’s industrial upgrading, but also a wake-up call for Chinese enterprises to compete with each other.Under the background of new energy transformation and the deepening of Africa Free Trade Area (AfCFTA), Chinese enterprises need to jump out of the single market perspective and position Algeria as the strategic triangle pivot point of “North Africa-Europe-West Africa”, so as to transform the policy dividend into sustainable growth momentum through differentiated layout.
Article source: Meet North Africa
