Boston, MA -- (SBWIRE) -- 06/25/2013 -- The year 2013 looks set to be yet another strong year for the Algerian autos industry, in line with BMI's views on the subject. We are currently forecasting a 15% increase in new car sales, to just below the 500,000 unit mark.

However, this forecast could well be revised upwards over the coming months, in light of the strong start to the year witnessed by new car sales. After just two months of 2013, the new car sales market is already reportedly up by 47% year to date, underlining the strong demand for vehicles on the part of Algerian consumers at the present time.

There are many reasons to be upbeat on the outlook for the Algerian auto industry. For one, BMI's Country Risk team is forecasting a strengthening of economic growth, from 2.2% in 2012, to 3.5% in 2013 and then 4.8% in 2014. BMI's Agribusiness Team also believes that wheat production will increase by almost 18% over the 2012/13 growing season, with higher crop yields also likely to boost domestic spending from farmers and workers in related industries. Rounding out a supportive backdrop, our Infrastructure team believes that 'the outlook for the Algerian construction sector points to a strong rebound in 2013, as new tenders are awarded while several projects are in the pipeline'. This should boost demand for new commercial vehicles in particular.

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The only potential threat to our upbeat view is the fact that private consumption may fall slightly over 2013, as higher spending on public sector wages is scaled back by the government. This may act as a brake on demand for new vehicles; however, early indications from monthly car sales figures year-to-date would seem to suggest otherwise.

On the production side, 2014 should prove to be a transformative year for Algerian auto production, with Renault soon to start output of cars. At the end of January 2013, the three shareholders in the new joint venture Renault Algerie Production - Renault (49%), Algeria's National Company of Industrial Vehicles (Societe Nationale de Vehicules Industriels - SNVI; 34%) and Algeria's National Investment Fund (FNI; 17%) held their first shareholders meeting. At this time, the joint venture's governance structures were established and the three shareholders confirmed the way ahead for the project.

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