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The Volkswagen Group has signed a joint venture agreement with its Algerian distributor, SOVAC , for the establishment of a Volkswagen assembly plant in the North African country. The deal is for a joint venture company, SOVAC Production S.P.A, that would ensure that a local assembly to be located in Relizane takes off from the spring of 2017 with daily production capacity of more than 100 units of the Volkswagen, Volkswagen Commercial Vehicles, SEAT and SKODA brands.
The joint venture agreement with Mourad Oulmi, CEO of SOVAC S.P.A, was signed in Algiers last weekend in the presence of the Algerian Minister of Industry, Abdessellam Bouchouareb, and Dr. Josef Baumert, Member of the Volkswagen Commercial Vehicles Board of Management responsible for Production and Logistics while Andreas Lauenroth, Head of Foreign Production of the Volkswagen brand, signed on behalf of the Volkswagen Group brands .
On the motivation for the contract, the Member of the Volkswagen Commercial Vehicles Board of Management responsible for Production and Logistics, Baumert, said: “The Volkswagen Group opted for participation in SOVAC Production S.P.A as we have co-operated successfully with our sales partner SOVAC for many years. For us, this is a logical step towards increasing vehicle sales in Algeria in the long term.”
This is as the Head of Foreign Production of the Volkswagen brand, Lauenroth, said: “For us, local assembly is an effective way of starting production in Algeria. We will be providing targeted training for local employees in quality, production and logistics at the European production facilities of our brands. This will enable us to reach “made in Europe” quality standards in Algeria.”
The new assembly building is under construction on a site with an area of 150 hectares in the region of Relizane, 220 kilometres to the west of Algiers. From the spring of 2017, SOVAC Production S.P.A. will be successively building up production capacity to more than 100 vehicles per day. The latest Group models Volkswagen Golf, SEAT Ibiza, ŠKODA Octavia and the Caddy from Volkswagen Commercial Vehicles will then be assembled at Relizane. The Volkswagen Group holds a minority stake in the joint venture.
SOVAC has been a sales partner for the Volkswagen, Volkswagen Commercial Vehicles, Audi, SEAT, ŠKODA and Porsche brands since 2001. The dealership network of the Volkswagen Group in Algeria includes over 100 facilities with 1,650 employees. In 2015, the Volkswagen Group delivered 30,000 new vehicles to customers in the North African country through SOVAC.
