Interview: Murad Oulmi, the CEO of Sovac talks about the Volkswagen assembly plant in Relizane.

The Volkswagen plant began production. How many pre-orders do you have?

We have a lot of orders. The Algerian market is large and it has been deprived of imports.

How do you proceed for pre-orders? How to ensure that there will be no delay in delivery?

We sell the vehicles with a chassis number and we have our own management system. The objective is to cut the road to intermediaries. We have put in place a purchase order per vehicle, per family, per address so as not to have the same person who comes out with several vehicles.

When will you start delivering the vehicles?

The first vehicles will be delivered between the end of July and the beginning of August, after the official inauguration of the factory.

What about the vehicles’ prices? Are they higher than it was before?

This is not the case. The current price is 20 to 30% lower than the price of vehicles sold six months ago. The Octavia was for example sold at 3.6 million dinars whereas now it is sold at less than three million. Ibiza was at 2.4 million, now it is less than two million dinars. We take into consideration purchasing power. We do not want to take advantage of the situation but fight the informal. We want to lower prices.

How will the production rate of the plant evolve?

For 2017, we are committed to producing 10,000 to 12,000 vehicles in six months. Then we aim to reach 20,000 to 25,000 vehicles per year.

Will there be other models assembled in the factory?

Probably, but we will stay on the models that meet the majority of the Algerian customers. We do not want to go on luxury versions.

How many people were recruited?

We already have 380 people recruited and we still want to recruit 550 people in the coming weeks. There will be about 5,000 direct and indirect jobs.

How long will it take to develop a real car industry?

It takes about ten years. Major manufacturers have taken a century to build their brands and an automotive industry. Tunisia took about ten years to develop the export of spare parts. Their first plan to set up export parts dates from 2000. So, we need the same time.

Do you think that there are too many players in the Algerian automobile market?

Today, if you want to exist as an automaker or subcontractor and be competitive, you need what is called the volume effect to reduce costs. So the question is whether our market is attractive or not and it is not the case for Algeria.

But, Morocco exports...

For us, car production is a way to become a major exporter of spare parts in the Maghreb region. In the automotive sector, one must not forget one basic thing: if we want to export spare parts, we must find a manufacturer who is willing to buy them from us, so the price has to be competitive so the question is: would a manufacturer in India or China buy a part produced in Algeria? In terms of transport and labor costs, we will not be competitive.

It is necessary to develop close cooperation with manufacturers who have a win-win interest in buying spare parts from Algeria. If Tunisia and Morocco are competitive, then Algeria should be competitive as well.

 

Adapted From: tsa-algerie.com

Ily Es

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