Volkswagen has been operating in Algeria for two decades.
Rabat – German car manufacturer Volkswagen announced the suspension of all its activities in Algeria until further notice. Volkswagen made the announcement on Saturday, December 14, only one day after the election of the new Algerian President Abdelmadjid Tebboune.
“Because of the political crisis in Algeria, Volkswagen has suspended production in this North African country at the moment. Deliveries to the official partner of the country, Sovac, have also been suspended,” Volkswagen told the German press.
The German company’s decision is a result of the political crisis in Algeria. The 10-month-old crisis started in February 2019 and is still ongoing, despite the election of a new president.
The German company explained that another reason behind their decision was the lack of transparency in their plans with their Algerian partner Sovac, especially after the arrest of its head in June.
On Thursday, June 13, Algerian police arrested Mourad Eulmi, the head of Sovac, at a car assembly plant in Relizane, western Algeria, over corruption allegations.
The arrest came amid a series of anti-corruption investigations targeting the ruling elite in Algeria.
One day after Volkswagen’s announcement, the Algerian partner responded by clarifying the situation.
According to a manager at Sovac, Volkswagen did not decide to suspend its partnership with the Algerian company, explaining that “more than 1500 assembly kits destined for Relizane plant are still blocked in Oran’s port, northwest Algeria, since last July, and more than 2200 kits are blocked in European ports.”
Following this unexplained blocking, Volkswagen decided to suspend shipping assembly kits to Algeria last August, explains the same source.
As a result, “around 700 employees are in technical unemployment” and the “plant stopped [functioning] since last September.”
Volkswagen has been operating in Algeria since 1999. In 2016, Volkswagen and Sovac opened a joint assembly plant in Relizane. The plant produced 50,000 vehicles last year.