Renault, Algeria to sign deal on new plant in August
June 22, 2012 12:00:00 AM
Algeria and French automaker Renault plan to sign a deal in August that will clear the way for construction of a new car factory in the north African country, an Algerian minister said Thursday.
Meanwhile, the French group confirmed in Monaco that it also hoped to launch two new models, one in the premium segment and another that would be a descendant of the long-lamented Alpine sportscar.
The announcement in Algiers by Industry Minister Mohamed Benmeradi followed two years of negotiations to build cars for the Algerian market at a new plant in the west of the country.
"Our teams have been working on finalising the shareholders' alliance since May 25, and it will probably be ready by early August," Benmeradi said on national radio.
He said the shareholders' alliance would within two to three months establish a joint venture between the Algerian government and the automaker, but that building work for the factory could begin sooner.
Renault signed a framework agreement with Algeria on May 25, but the two have still been hammering out the final details of the deal.
Neither side has given financial details on the plans, saying negotiations are ongoing.
The talks have reportedly snagged over the question of location, with Algerian officials initially pushing the Mediterranean port of Jijel, 350 kilometres (200 miles) east of Algiers, to boost regional development.
The French group was said to prefer a site in the suburbs of Algiers because it would be easier to find qualified workers near the capital.
Benmeradi said Thursday the government had eventually proposed two new sites, Oran and Mostaganem, both port cities in the west of the country.
In addition to the Renault brand, the company owns two low-cost brands, the former Romanian company Dacia and the Korean Samsung.
In Monaco, Renault's number two executive Carlos Tavares said Thursday: "With a bit of luck, we will add a high-performance brand that will be based on the Alpine."
He presented a concept Alpine A110-50 design last month on the sidelines of the Monaco Formula 1 grand prix race.
Tavares said then that a decision on the launch would be made "by the end of the year," and that if approved, models would hit the streets within three to five years.
The other mooted model would be a high-end automobile to fill a long-standing gap in Renault's product line.
Previous flops have left Renault wary of developing such a car, but the segment is a promising one in developing markets.
"We have learned a lot from our mistakes," Tavares said.
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