The return of Kizza Besigye to the political frontline in Uganda to lead a new pressure group called The Front for Transition, was snubbed by ... the main opposition party National Unity Platform (NUP) of Robert Kyagulanyi aka Bobi Wine. The new party has upped suspicion among Wine supporters, but has also reignited debate of what has been the main problem bedevilling opposition parties in Uganda. And the problem is disunity.
What’s left of it is desperately empty showrooms, car dealers with nothing left to sell and a second-hand automobile market whose prices are higher than ever. With a fleet of more than 6.5 million cars registered at the end of 2019, the Algerian automotive sector – which was once one of Africa’s most dynamic – is at a standstill.
The ever-changing import rules have ended up greatly reducing the flow of vehicles into the country, while local manufacturing has virtually ground to a halt ever since May 2020, when the government decided to cancel the preferential regime for importing parts for car assembly. As a result, Algeria has become one of the few countries in the world where one can buy a car, use it for several years and then resell it for more than its initial price.
According to Abderrahmane Achaïbou, Algeria’s oldest car dealer and CEO of the Elsecom group, Algeria’s automobile industry has experienced three major failures.
“If the authorities really want to allow citizens to acquire a reliable car at an affordable price, then they must agree to import real second-hand vehicles.
“There was the incident involving the defunct Société Nationale de Construction Mécanique (Sonacome) in the 1980s; then that of the famous Fatia project with Fiat, which was abandoned due to the low volume of production, as it only resulted in 30,000 vehicles per year. Finally, the third failure was related to the introduction of the 2014 finance law, which forced dealers to transform themselves into car manufacturers within three years,” Achaïbou says.
“I was dispossessed of my brands – Kia, Ford, Suzuki, Daewoo and Isuzu – because I went on television and said that the industrialisation policy was not realistic,” says the Elsecom boss, who is very upset with Abdeslam Bouchouareb, minister of industry from 2014 to 2017, whom he accuses of having favoured those close to him. The latter has recovered automobile distribution contracts.
In 2012, Algeria’s automobile market was nevertheless flourishing, with a record 605,000 imported vehicles. That year, the authorities signed an agreement with Renault to set up the first car factory in Oued Tlelat, near Oran. Two years later, in 2014, the Renault Symbol, the first locally assembled car, arrived in the market. This car underlined the contradictions of Algeria’s new industrial policy, as the Symbol that was manufactured in Oued Tlelat cost more than the same imported model.
But no matter. Attracted by the sheer volume of the cars that the Algerian market was producing, manufacturers such as South Korea’s Hyundai and Kia, Germany’s Volkswagen and France’s PSA began following in Renault’s footsteps by announcing industrial projects that ended up taking months to become a reality. As far as PSA was concerned, the Peugeot factory was still on the drawing board due to a lack of mutual understanding between them and the authorities.
Fake assembly plants
Imports then flourished for several years, and some factories actually went into production until the sudden stop in May 2020. Several bosses, who were accused of corruption and fraudulent imports – linked to fake assembly plants – were convicted and jailed. Most of the factories then either suspended production or closed down.
“In all, 300,000 vehicles were assembled locally, for $8bn. With this sum, 800,000 small cars could have been imported. Big manufacturers are responsible for assembling. Nowhere else do dealers become manufacturers,” says Achaïbou.
“For the moment, only three manufacturers – Renault, Volkswagen and China’s Chery – have received authorisation to restart their assembly lines after the assembly kits passed the exceptional measure of customs clearance, in order to clear all the outstanding production and ease pressure on the demand for vehicles,” says Adel Bensaci, president of the Conseil National Consultatif de la Petite et la Moyenne Entreprise (CNCPME). Renault will thus have to produce 4,600 vehicles at Oued Tlelat.
“The Algerian automobile market is now completely destructured. The factories produce extremely little. Dealers can no longer import new vehicles. They can only bring them in from abroad through licences granted to the moudjahidine (former fighters in the war of liberation). They either come from Europe – mainly from France and Germany – or from the Middle East,” says Nadir Kerri, a journalist specialising in this field and founder of the Autojazair website.
However, the current government seems to have realised that the present situation is unsustainable. As soon as the new minister of industry – Mohamed Bacha – was appointed in February 2021, he began to relax guidelines (related to import and manufacture of new vehicles) that had been put in place in August 2020 by his predecessor Ferhat Aït Ali. Professionals had criticised the latter for his lack of knowledge about the sector.
Since their establishment, all car assembly plants have been required to integrate a minimum 30% of local suppliers. However, this figure may be revised downwards. “It was not at all adjusted to the existing industrial fabric,” says Kerri. “Finally, no Algerian industrial group currently has the capacity to manufacture a vehicle. If we have to do it, we might as well prepare for the electric vehicle, because in a few years the thermal engine will be outdated,” says Achaïbou.
“We are also expecting, in the coming weeks, that the government will grant new approvals for vehicles that are due to be imported from September or October,” says Kerri.
In the private sector, measures relating to imports have been somewhat relaxed, but remain restrictive. Algerians can now buy one vehicle that is less than three years old, every three years, through a foreign currency account opened in the country. Additionally, the law requires that the individual importer be of Algerian nationality and a resident of the north African country.
Youcef Nebbache, the former president of the Association des Concessionnaires Algériens, has called for the age of vehicles authorised for import be extended to five years. “If the authorities really want to allow citizens to acquire a reliable car at an affordable price, then they must agree to import real second-hand vehicles,” he says.
The market, which has been disrupted by the authorities’ drastic measures to promote an industrial boom, has shrunk; to the detriment of dealers, manufacturers and consumers.
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