The deal – which marks Renault’s return to the country after 33 years of absence – will see the construction of a manufacturing plant in Oued Tlelat, south-west of Oran, which will build Renault Group passenger cars and LCVs, mainly for the Algerian market.

The plant will have an annual production level of 25,000 vehicles from 2014, with the option to increase this to 75,000 vehicles per year. The first vehicle to be manufactured there will be the new Symbol four-door sedan model, the country’s best-selling model.

Renault will own 49% of the JV, with SNVI contributing 34% of the 51% held by the Algerian partners and FNI holding 17%.

Renault will provide the training expertise and technology for the project, while local industries will increasingly be called into use within the production plant, including body shop, stamping and painting, and also outside production through a network of subcontractors, in a move intended to help develop the local automotive industry.

Renault’s Jean-Christophe Kugler, chief operating officer, Euromed-Africa region, said: ‘It is a pleasure and an honour to be playing a part in the signing of this agreement which aims to develop Algeria’s automobile industry. Renault is proud to be the first carmaker to establish production facilities in Algeria. It is also proud to be contributing to the automobile industry’s development in the country.’

The facility will be the carmaker’s second plant in North Africa, following the start of production at its facility in Morocco earlier this year. Unlike the plant at Tangier, the Algerian development will focus on production for the local market.

For the first half of 2012, Renault sold 45,092 units in Algeria, giving it a 20.0% market share.