Automotive industry: Towards the takeover of assembly lines

After nearly a year of shutdown of vehicle assembly plants in Algeria, the authorities have given their authorization for the resumption of certain assembly lines, yesterday Adel Bensaci, president of the National Consultative Council for Small and Small Business, told us. medium-sized enterprises (CNCPME) and former president of the mechanical cluster.

The day before yesterday, during his radio broadcast, Mr. Bensaci underlined that this decision will allow "to settle all the work in progress and to lift the pressure on the demand for vehicles". However, the same interlocutor did not reveal to us the identity of the operators who will soon take over the assembly activity.

However, “these operators will be subject to the taxes and customs duties currently in force and will not benefit from the tax advantages, as was the case previously,” he told us. Mr. Bensaci called on this occasion for the stabilization of the legislation as well as the establishment of a long-term strategy to give confidence to operators and their foreign partners. Something that is not feasible in the near future, the Ministry of Industry being about to review the specifications on the imports and production of new vehicles to see if it is possible to lighten it.

Structural reforms

In this wake, Mr. Bensaci expressed his wish to see structural reforms in the field of industry, avoiding the amalgamation of political and economic considerations.

It should be noted that since the cancellation of the preferential regime for the importation of SKD / CKD in May 2020, all car assembly factories have closed their doors, putting thousands of people out of work.

According to the Minister of Labor, Employment and Social Security, El Hachemi Djaâboub, no less than 51,000 jobs have been lost in the automotive and household appliance sectors after the decision to close assembly factories in the country. Therefore, Mr. Bensaci stressed that if the authorities want to recover these jobs, we must restart as soon as possible, knowing that the infrastructure and skills exist, and this could quickly take effect in the next six months.

Thus, faced with this situation, the authorities had to review their plan by allowing the relaunch of these factories with the aim of recovering some of their employees, but also in order to meet market demand, which is under pressure following the lack of supply causing prices to increase to very high levels, which are not within everyone's reach. According to Mr. Bensaci, it appears that the prices of these vehicles which will be assembled locally will not be different from those which will be imported from abroad.

In any case, the fall in the value of the dinar and the introduction of several taxes on imports will increase the prices of new vehicles on the market. So far, the Ministry of Industry has granted seven provisional authorizations for the importation of new vehicles, pending final authorizations. Currently, the market has not been supplied for more than a year with new vehicles, which has caused prices to rise on used vehicles, which are selling for more than the price they left the factory.