• New plastics factory aims to supply Algeria’s growing auto assembly sector

• Project seeks to reduce imports and raise local content in vehicle production

• Government pushes stricter integration rules after past factory closures

Algerian Prime Minister Sifi Ghrieb laid the foundation stone last week for General Plastic Injection (GPI), a future factory that will produce plastic components and accessories for the automotive sector. The project is part of a broader effort to build a local supply chain and support the development of the industry.

The facility will cover 107,000 square meters in Tissemsilt, in the country’s central-west region. It is expected to begin production in September and will manufacture body parts, interior components, and technical accessories. The goal is to increase the share of locally made parts used by vehicle assembly plants operating in Algeria.

Ghrieb said the factory would help drive a new phase of development in the automotive sector by relying on advanced technologies. He added that the project is part of a broader plan to recover and repurpose assets seized through final court rulings.

The plant will operate using assets from Plastic Algeria Components (PAC), a company confiscated from a businessman convicted of corruption. Those assets were transferred in January to the state-owned holding company Algeria Chemical Specialities (ACS) to support the launch of a plastics manufacturing operation for the automotive sector.

Push for higher local content

Several international automakers already run assembly plants in Algeria, including Stellantis with Fiat models, as well as Chinese groups BAIC and JAC Motors. Other projects led by companies such as China’s Chery, Italy’s Iveco, and South Korea’s Hyundai are nearing completion.

The Algerian government offers incentives to attract automakers, including tax breaks on imported inputs and access to land at reduced cost. In return, manufacturers must meet local content requirements. These start at a minimum of 10% by the end of the second year of production and rise to 40% by the fifth year.

In recent years, several assembly plants have shut down, including those operated by Volkswagen, Renault, and Kia. The closures were largely tied to failures to meet local integration targets, in a context where a strong domestic supplier base has been lacking.

This gap has slowed the development of Algeria’s auto industry, despite its status as a government priority aimed at reducing vehicle imports and diversifying the economy.

To address this, authorities are now working to build a network of subcontractors, either state-owned or formed through joint ventures with foreign partners. In March 2025, the state-owned company Anabib signed an agreement with Chinese supplier Auto Lumiar to create a joint venture producing equipment such as headlights and bumpers.

Walid Kéfi