African Automotive Forum Positions Algeria in Value Chain
The African Automotive Investment Forum, held in El Alamein, Egypt, recently convened political officials, investors, automakers, equipment manufacturers, and financial institutions to discuss the continent's automotive future. Organized by Afreximbank in partnership with the African Continental Free Trade Area (AfCFTA) Secretariat, the forum focused on “Unlocking the potential of the automotive industry in Africa within the framework of the AfCFTA Agreement.” Discussions centered on establishing a robust African automotive value chain by leveraging market complementarity, fostering subcontracting, and facilitating the movement of investments and components across nations. Algeria actively participated in these critical discussions, represented by its Minister of Industry, Farid Kourtel.
During the forum, Minister Kourtel engaged in bilateral meetings with several Egyptian officials, including Foreign Minister Badr Abdelatty, Industry Minister Khaled Hachem, and Investment and Foreign Trade Minister Mohamed Farid Saleh. A significant meeting also occurred with Tarek Ismail Mosaad, President and CEO of Hyundai Motor for the Middle East and North Africa region. This meeting follows the South Korean manufacturer's recent confirmation of an industrial project in Algeria, part of its 2030 development strategy. The planned Hyundai facility, a joint venture with Omani partner Bahwan Saud, is slated to begin production in late 2026 or early 2027 at the former Sovac industrial site in Sidi Khettab, Relizane wilaya, with an anticipated annual capacity of 50,000 vehicles. This $400 million investment initially targets accessible SUVs and light utility vehicles, with future plans to expand into city cars and electric models. The venture has already commenced identifying local suppliers to enhance domestic production.
Algeria's broader commitment to developing its automotive sector is further evidenced by ongoing initiatives from other major players. Stellantis El Djazaïr is expanding its Fiat plant in Tafraoui, aiming to increase its production capacity to 135,000 vehicles per year by 2028, alongside efforts to boost local supplier involvement. Additionally, utility vehicle manufacturers Tirsam and JAC-Emin auto intend to export their vehicles to other African countries. These efforts align with a national drive to structure the industry, as demonstrated by the interministerial working group established in February to develop a national integration framework for car, bus, and motorcycle industries. The El Alamein forum underscores the importance of these national strategies within a continental context.
The AfCFTA's objective to move beyond fragmented national markets to an integrated continental automotive production system, involving specialized suppliers and interconnected supply chains, provides a framework for Algeria's industrial evolution. This approach could significantly strengthen subcontracting opportunities and encourage market specialization across Africa. Afreximbank is actively supporting this vision through a study on African automotive value chains, identifying projects for potential development and financing, with the aim of fostering industrial capabilities that contribute to a unified continental strategy.
