These Are The Reasons Behind The Hike In Car Prices In Algeria

The Adviser to the Ministry of Industry and Mines, Mr. Abdelkrim Mustapha, has stated that the bill for the import of spare parts that are included in the assembling of vehicles and subsequent activities in Algeria amounted to about $ 1.6 billion in 2017.

Launched in 2014, the CKD / SKD vehicle assembling activity has reached a production rate of “60,000 units per year,” said Mustapha Abdelkrim, adviser to the Office of the Minister of Industry and Mines said Sunday morning in Algiers, during his interview as Guest of the editorial staff of Channel 3 of the Algerian Radio.

Mr. Abdelkrim also gave the value of imports of CKD / SKD vehicle assembly kits, which amounted to “$ 1.6 billion” as of February 24, 2018.

“It’s quite normal, because factories already in production since 2014-2015 have been growing at a rate of 60,000 vehicles produced per year, and new plants, which started in 2017, need to import spare parts for the assembly of their vehicles, “said Abdelkrim, who gives the number of 7 assembly plants, currently in production: 4 for passenger vehicles ((Renault, Hyundai, Sovac and Kia) and 3 in the field of truck .

The first list selected was for passenger cars and some trucks only, but the new list was extended to other types of vehicles such as wheeled vehicles and motorcycles, which represent more than a dozen manufacturers, added Mr Mustapha Abdelkrim.

“The State gives benefits, grants exemptions, gives facilities to investors who must, in return, comply with a certain number of rules contained in the decree (of November 28, 2017) which aims to regulate the activity”, warned Mr Abdelkrim.

Among these rules, there is the enforcement of progressive integration rates, whose implementing text, by inter-ministerial order, has just been finalized, he further underlined.

According to Mr. Abdelkrim, the assembling of vehicles is only one step, “the objective is to establish a real vehicle industry, by a gradual integration rate”, recalling that the required integration rate is 15 % at the end of the 3rd year and 40 to 60%, depending on the type of vehicle, after 5-6 years of production.

In fact, Mr. Abdelkrim, explained that the goal is to capture maximum value added here in Algeria, and reduce imports. “We have a politically stable country, an incentive framework for investment and a market of more than 500,000 vehicles / year, by 2021-2022”. 

“It’s a sufficient size to attract manufacturers and equipment manufacturers and allow them to make their investments profitable, sell part of their production here in Algeria and export abroad”, the representative of the Industry and Mines Ministry further underscored.