Josef Baumert (L), the Executive Vice President of Volkswagen for commercial cars, Mourad Oulmi (R), chief executive officer of SOVAC group, and Algerian Industry and Mines Minister Abdeslam Bouchouareb, pose for a photo after signing an agreement in Algiers, capital of Algeria, on Nov. 27, 2016. German giant automaker Volkswagen inked a Memorandum of Understanding on Sunday with its Algerian sales partner SOVAC to establish an assembly plant in the North African country, according to a senior official from SOVAC. (Xinhua)
ALGIERS, Nov. 27 (Xinhua) -- German giant automaker Volkswagen inked a Memorandum of Understanding on Sunday with its Algerian sales partner SOVAC to establish an assembly plant in the North African country, according to a senior official from SOVAC.
The plant will be set up in the province of Relizane, 220 km southwest of the capital Algiers, said Mourad Oulmi, chief executive officer of SOVAC group.
"As by the spring of 2017, the plant will start assembling gradually an average of 100 cars a day," Oulmi told reporters. "It will then assemble the latest Volkswagen Golf models, in addition to Seat Ibiza, Skoda Octavia and Volkswagen Caddy vans."
With an investment worth 180 million U.S. dollars, the plant, which aims to export to Africa and the Arab region, will produce 12,000 vehicles for the first year, and then gradually reach a volume of 100,000 units within five years, he added.
In addition, he said, the plant will ultimately generate 1,800 direct and 3,500 indirect jobs.
French automaker Renault and South Korean Hyundai have each already set up an assembly plant in Algeria.
A ministerial decree in 2014 required all foreign car dealers to establish assembly plants in Algeria, as part of the country's plan for industrialization.