Towards the closure of the Renault Algeria factory?

Towards the closure of the Renault Algeria factory?

The Renault Algeria factory, which has been facing multiple problems for more than two years, risks closing its doors. This was revealed on Wednesday May 11, 2022 by the French magazine L’Argus, citing an analysis of the company INOVEVspecializing in the automotive industry.

The automotive sector around the world has been hit hard by the war in Ukraine. The shortage of raw materials combined with rising energy prices has meant that the majority of car manufacturing plants are idling. The Ukrainian crisis has also prompted the Renault manufacturer to definitively stop its production in Russia.

The Renault Algeria factory is no better off. Inaugurated in 2014, the Renault car assembly unit located in Oued Tlélat in the wilaya of Oran was shaken by a first crisis in January 2020. After the Algerian government’s decision to ban imports of SKD / CKD kits and to remove the tax benefits granted to car manufacturers established in Algeria, the management of Renault decided to suspend production and close the Oran plant.

Will the Renault company close its factory in Algeria?

A decision that was not without consequences for many Algerian customers who found themselves unable to recover their cars, even though they had ordered them. Two years later, on January 22, 2022, Renault Algeria announced the partial resumption of car production at its factory located in Oran.

However, this partial takeover of Renault Algeria concerned the production of 4,500 new cars of 3 brands: Symbol, Clio and Sandero. These 4,500 units correspond to the number of assembly kits (CKD-SKD) which were outstanding at the port of Oran and which the Algerian authorities cleared through customs for the benefit of Renault Algeria. The 4,500 cars were primarily intended for customers who had already placed an order.

Idling for more than two years, the Renault Algeria plant has never managed to reach the figures achieved between 2015 and 2020, namely a production capacity of 50,000 vehicles/year. Faced with this situation, information reports Renault’s decision to withdraw from its project in Algeria and sell its factory located in Oran.

Indeed, in its latest monthly analysis, quoted on May 11 by the magazine L’Argus, the company INOVEV, which specializes in the automobile industry, revealed that Renault could sell its Algerian factory. “The Oran plant does not at all meet the manufacturer’s objectives since it no longer manages to come close to the targeted production level of 75,000 vehicles per year, on the basis of a response to local demand which had suffered at the time from the cessation of automobile imports”, explains the same source.

Renault refutes its intention to leave Algeria

The Renault manufacturer “which has always favored its site in Tangier in Morocco may have misunderstood the attitude of the Algerian government concerning its “screwdriver” factory in Oran, indicates the company INOVEV, which noted that in 2021 the manufacturer French has decided to transfer the production of the Dacia Logan brand from the factory in Oran to that in Tangier, Morocco.

However, the French manufacturer insisted on denying the information given by the company INOVEV concerning the closure of the Oran factory. “Actually the volumes assembled are still very low, but in no case have we announced that we are going to leave Algeria, which remains an important market for Renault,” Renault told L’Argus magazine. The latter affirms that the French group “continues to discuss with the Algerian government to remedy this situation”.