New Transportation market report from Business Monitor International: "Algeria Autos Report Q4 2013"

Boston, MA -- (SBWire) -- 09/12/2013 --H113 sales figures for the Algerian new car sales market continue to support BMI's long-held optimism towards the country. A total of 247,091 cars were sold over H113, representing an increase of 14.65% yearon- year. This puts the country well on track to hit BMI's forecast of 498,318 units for the full year.

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 3.3% in 2013 and then 4.6% in 2014. Inflation should also remain under control, with consumer price inflation (CPI) for the capital Algiers coming in at 3.1% in April 2013, having averaged 5.2% over the first four months of the year. BMI forecasts CPI averaging 5.9% in 2013, a steep decline from 8.9% in 2012. This could open the way for monetary policy to remain relatively loose, aiding those Algerians who need financing for car loans.

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BMI's Agribusiness Team also believes that wheat production will increase by almost 21.4% 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.

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, indications from H113 car sales figures 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 and Mercedes-Benz soon to start output of commercial vehicles. 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.

In this context, the first Algerian-built car should be produced in November 2014 from the new Oued Tielat factory in Oran province, according to a February 2013 report in the French-language newspaper Liberte. Before then, the Chairman of SNVI, Hamoud Tazrouti, said in June 2013 that the first 'made in Algeria' Mercedes-Benz commercial vehicles should be coming out of the factories at Rouiba and Tiaret during the first quarter of 2014.

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