Algerian Government Rejects French Offer Of PSA Stake, Seeks Renault's Love

Derek Kreindler
by Derek Kreindler
algerian government rejects french offer of psa stake seeks renault s love

The fate of PSA and the Algerian people has been intertwined for decades. The group’s Aulnay plant, which is due to close, was originally staffed by immigrants from North Africa, lured by the promise of a better life and secure jobs in France. And while Peugeot sales withered in France, the brand has been traditionally strong in North Africa, with 2011 bringing a 93 percent increase in sales for Peugeot.

But Algeria’s push for a domestic car industry doesn’t seem to include PSA. Arch-rival Renault is due to set up a factory in the country, but PSA has apparently rejected overtures from the French government to take a stake in the ailing car maker.

French President Francois Hollande is due to visit Algeria this week, and is eager to discuss the possibility of Algeria investing in PSA. But according to French paper La Tribune, Algeria wants no part of it.

Instead, they want to emulate the situation in Morocco, and that means a domestic car manufacturing industry in partnership with Renault. La Tribune reports that a deal with Renault will be signed any day now, and Algeria even decided to forgo a plant with Volkswagen so the Renault deal could go forward. Under the terms of the Renault agreement, the Algerian government will hold a 51 percent stake in the plant, which will produce the Renault Symbol – a rebadged Dacia Logan.

Despite the rebuff, PSA is still strong in Algeria, with Peugeot ranking as the #2 brand behind Renaul t. But that won’t do much to aleviate PSA’s troubles in its home market. The birth of a domestic auto manufacturing industry in the former colonies, right alongside the slow death of France’s own industry only makes things worse.

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  • CJinSD CJinSD on Dec 18, 2012

    Anyone else think that the 301 in the photo needs its lion badge moved from the hood to the grill? It seems like other current Peugeots have the same problem. Such a simple thing, but at least then people could tell the cars are Peugeots.

  • Robert.Walter Robert.Walter on Dec 18, 2012

    Car in pic seems to have tires too large and too far outboard for the openings, else it has only like 1" jounce travel!

    • Marcelo de Vasconcellos Marcelo de Vasconcellos on Dec 18, 2012

      In this category, base trim levels take 14 inchers, mid 15 and probably you'll be able to pay through the nose to get 16s. Nah, 14 inches due the job fine by me. Anyways, in this B-segment-sized, A-segment-priced segment (invented by Renault with its Logan), this Peugeot is surely the winner in the looks department. Now, if they just could get back some of the handling and ride characterisitcs they were famous (and loved) for back in the 80s, and keep the price really, really competitive with Logan (bottom of the market not top Peugeot), this could be the proverbial homerun that would save their threatened bacon. I'm keeping my fingers crossed (but preparing to be disappointed).

  • LDMAN1 LDMAN1 on Dec 19, 2012

    What would the local content of these Renault CKDs be? Algeria does not have local component (glass, exhaust, cabling, seats, batteries, etc..) industry that Morocco or Egypt have. Will these local Renault cars benefit from a lower VAT rate? I hope someone studied the whole thing before rushing. Having an automobile industrial base has long been a "wish" of the Algerian Government. FIAT had a similar project to build a factory in Algeria in the 70s. It never happened. The story goes that Gianni Agnelli himself came down to visit the site at one point and canned the whole project.