Geely, JAC & Chery, Algeria & The New Silk Road

Leading Chinese automakers Geely, Chery and JAC are pursuing plans to further establish car manufacturing in Algeria.

This is largely in response to important restrictions implemented in Algeria in 2023. 

Algeria has been facing economic decline for several years due in part to a lack of economic diversification.

The nation faces high costs of living and a sharp decline in the purchasing power of the average Algerian household. 

In response to this, local authorities have restricted automobile imports as part of a process to revive the nation’s automotive industry.

Because of this the number of car companies- like Chery, Geely and JAC- seeking to establish manufacturing facilities in the country has skyrocketed.

But these three automotive manufacturers are not only seeking to establish facilities in Algeria to tap into local markets.

This is also driven by a goal to solidify and grow their North African presence, accelerating global expansion.

JAC, Geely and Chery are all deeply committed to expansion throughout the North African automotive market. 

Geely’s globalisation strategy emphasises a “high-value global expansion” approach, focusing on supply chain optimisation, service quality, channel expansion and product development. 

The manufacturer has ranked among the top three for Chinese brand vehicle sales in the UAE, Saudi Arabia and Qatar, with its Coolray SUV model becoming a top choice in those same countries in addition to Kuwait. 

All three brands have strong ties to one North African nation in particular: Egypt. 

Since the 1950s Egypt has had a rich automotive manufacturing history, with a wealth of spare parts factories and assembly plants. 

Earlier this year Geely's world's best-selling model, the high-powered and smart SUV, Geely Coolray, was officially launched in Egypt.

Geely also opened it's Egypt Auto Mobility flagship store, a pivotal moment for the brand's visibility and development in the country.

Mr. Song Jun, General Manager of Geely International Sales Company commented: 

"Geely will continue to deepen cooperation with excellent partners, work together to build a win-win and sustainable development partnership, in-depth localisation, comprehensively aggregate resources from various channels, and work together to achieve Geely's brand direction in Egypt that is upward and innovative that will provide local consumers with an easy, convenient and pleasant car buying experience."

Last year Chery Egypt introduced the Chery Tiggo 4 Pro to the Egyptian market, after the exceptional popularity of the Tiggo 8. Distributed by GB Auto, the Chery Tiggo 4 Pro is assembled in Egypt, combining a safe, stylish aesthetic with cutting-edge technology. 

“Chery stands out as one of the top automotive brands in Egypt, exclusively distributed by GB Auto,”  said Farid Fadel, Chery Sales Vice President at GB Auto.

“The launch of the Chery Tiggo 4 Pro is a testament to our ongoing dedication to delivering excellence in the Egyptian automotive industry.”

Last year JAC also held a grand signing ceremony with its Egyptian partner in Hefei, strengthening ties. 

Investment between Egyptian and Chinese companies is far from unprecedented.

Vision 2030 & The BRI 

Egypt was the first Arab and African country to establish direct diplomatic relations with China in 1956. 

For the last eight years, China has been Egypt’s largest trading partner in the world, with the construction of the new Egyptian administrative capital and the development of the Suez Canal Corridor both examples of China-Egypt cooperation. 

Egypt is in a vital strategic spot: it borders the Suez Canal and the Maritime Silk Road, in addition to its position at the intersection of the continents of Africa, Europe and Asia. 

Egypt was also one of the first countries to join the “Belt and Road” initiative (BRI), also known as the New Silk Road, the global infrastructure development strategy adopted by the Chinese government in 2013.

Last year marked the 10th anniversary of the BRI, which is a strategy to invest in more than 150 nations and international organisations to connect Asia with Africa and Europe via land and maritime networks.

Manufacturing collaboration between JAC and Egypt fulfils both the BRI and the ‘Vision 2030’ plan put forward by the Egyptian government. 

In fact, Vision 2030 plans across North Africa and the Middle East are highly compatible with the BRI, including in Algeria.

Algeria’s Vision 2030 plan seeks to set the nation on a path of non-hydrocarbon GDP growth of 6.5% per year over the period 2020–2030.

Algeria’s plan focuses on economic diversification based on promoting non-hydrocarbon exports in addition to import substitution and productivity growth.

For this reason, collaboration between Geely, Chery, JAC and the Algerian government may be a net positive for both parties, improving economic conditions and fuelling respective governmental initiatives. 

Plans in motion 

This is the first time Geely and Chery are establishing manufacturing presence in Algeria. JAC previously built a light truck KD plant in the country.

Chery officials shared last year that the company’s plant will have a preliminary production capacity of 24,000 units per year, and will be established in the city of Bordj Bou Arreridji.

The company plans to ramp up production capacity to 100,000 vehicles over the following three years, exporting cars to other North African countries. 

This facility will have a preliminary production capacity of 24,000 units per year. In the next three years, Chery will ramp up the production capacity to 100,000 vehicles per year. As a result, the factory will also export cars to other North African countries.

Geely plans to invest US$200m according to its local partner Sovidem to build an automotive plant in Algeria with an initial production capacity of 50,000 units.

With a planned operating date of 2026, the first model manufactured there will be the Geely GX3 Pro ( Geely Vision X3). 

Geely Algeria in the meantime continues to receive imported cars from China.

Allowing Geely, Chery and JAC to manufacture within Algeria would provide notable advantages for both Chinese companies and the wider Algerian automotive sector.

There's the potential for Algeria to effectively resurrect and enhance its economy.

Geely, Chery, and JAC will also be able to use those local plants as the export platform to solidify their presence in North Africa.

This potential will all be dependent on the decision of the Algerian authorities. 

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