PARIS/ALGIERS (Reuters) - Peugeot maker PSA Group (PEUP.PA) signed a joint venture agreement with three Algerian partners on Sunday to build cars in the North African country.
The French carmaker said it would invest around 100 million euros (88.44 million pounds), equalling 49 pct of the joint venture’s capital.
The joint venture will set up a plant in the western Algerian city of Oran, where French automaker Renault (RENA.PA) opened a plant in 2014.
The Algerian partners are Condor Electronics, Palpa Pro and Entreprise Nationale de Production de Machines-Outils (PMO), PSA said in a statement.
The plant will start some production next year and be fully operational in 2019, PSA said.
The agreement was signed in Algiers as part of the France-Algeria joint economic committee (COMEFA), in the presence of French Foreign Minister Jean-Yves Le Drian and French Economy, Finance and Industry Minister Bruno Le Maire.
They said France was seeking to boost investment in its former colony after losing ground to countries including China, Turkey and Italy.
Algerian ministers present at the signing also said they hoped France would boost its investment in the North African country.
“We need to point out the weakness of the partnership in our economic relations, including FDI (foreign direct investment),” Algerian Foreign Minister Abdelkader Messahel said.
The agreement will enable PSA to achieve its goal of selling 700,000 vehicles in the Middle East and Africa region by 2021, PSA Executive Vice President, Africa-Middle East, Jean-Christophe Quemard said in the statement.
Groupe PSA said it sold 383,504 vehicles in the region in 2016.
Reporting by Sybille de La Hamaide and Lamine Chikhi; Writing by Aidan Lewis; Editing by Susan Fenton