German car manufacturer Volkswagen and Sovac group, official representative of Volkswagen in Algeria, inked Sunday in Algiers a memorandum of understanding on the creation of a plant that will assemble cars of this brand in Algeria.
The plant, which will start production on June 2017, will be built in the industrial zone of Sidi Khatab (Relizane). The plant's capacity will reach 12,000 units in the first year of its activity, and 100,000 vehicles/year after five years.
This MoU has been signed by the Executive Vice President of Volkswagen for commercial cars Joseph Baumert and CEO of Sovac group Mourad Oulmi, in the presence of Minister of Industry and Mines Abdessalem Bouchouareb.
Both parties also signed a technological pact to ensure transfer of technological expertise in the car industry field to Algeria.
The investment cost of this project is estimated at €170 million while the integration rate of this plant will reach 40% after 5 years of production.
Four models will be manufactured by the plant, namely Volkswagen Golf 7, Seat Ibiza, Skoda Octavia and Volkswagen Caddy. The first car will be released by June 2017.
Over 1,400 jobs will be created once the plant comes into service.
Algeria will manufacture 500,000 units in 2019 through various car manufacturing plants
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