Japan's second-largest automaker Nissan Motor Co has signed a joint venture agreement with an Algerian private partner to build a car assembly plant at a cost of $160 million, the company said on Wednesday, reports Reuters.
The plant, near the western city of Oran, is due to start production in the first half of 2020 with a capacity of 63,500 vehicles per year, Peyman Kargar, Nissan's senior vice president and chairman of operations in Africa, Middle East and India, said at a signing ceremony in Algiers.
Nissan's partner, Hasnaoui Group, will hold a majority stake in the project, which is expected to create 1,800 jobs.
Algeria has banned car imports as part of an attempt to cut spending due to lower oil and gas earnings, the main source of state finances.
"We want to help diversify our economy," said Hasnaoui Group's owner Sofiane Hasnaoui.
The North African country, an OPEC member, has been trying to attract foreign investment and develop the non-energy sector, which accounts for just 6 per cent of total export revenues.
"Algeria is a big country for us. Thanks to government's support, we managed to conclude this deal," said Kargar.
"Our top priority is to meet local demand but we will think about exporting our product later," he added.
The deal also includes training of the plant's employees by Nissan staff, Hasnaoui said.