The used car market in Algeria is experiencing a dramatic increase, reaching unprecedented levels, the price of an old car, such as the first-generation Renault Megane, manufactured in 2001, now exceeds 8,000$, an astronomical price for a dilapidated, old car.
There are many types of cars that were previously unsold due to poor manufacturing or known engine problems. However, due to the lack of new cars, they are now sold normally and are in demand in the market.
Anyone looking at the roads of Algeria will notice that the majority of cars are old, as if time stopped in 2016, most new cars were manufactured in 2016, the same year that saw the beginning of restrictions on car imports.
Car prices are no longer tied to their exterior condition, year of manufacture, or even the mileage, in fact, nothing determines them, you can find cars more than 20 years old at prices equal to or exceeding those of new cars.
When imports were allowed for a limited period, some dealers imported Chinese cars for 15,000$, at this price, there are dozens of models of old cars, some over 20 years old.
This is a strange phenomenon that doesn’t occur in every country. How can a new car be sold for the same price as an old one?
The problem with the Algerian car market isn’t just the prices or the lack of new cars. The problem is the scarcity of spare parts, when they are available, they are counterfeit and fake.
There is no explanation for the Algerian government’s ban on importing spare parts.
Another problem has recently emerged: the high cost of car tires, prices have tripled at least threefold, and you can now find almost only one type of tire on the local market: locally manufactured Iris tires, these are poor quality tires designed for cars only, and there are no Iris tires for trucks, excavators, or motorcycles.
The only problem that has been resolved is the high cost of motor oils, Naftal recently began marketing European Castrol oils at a fixed price, as motor oil prices have skyrocketed, often due to the Algerian government’s import ban.
Motor oil prices haven’t fallen to their previous levels, but at least they have decreased slightly and are now available and of high quality. These are guaranteed original oils, not counterfeit ones.
Local car manufacturing is the solution
Manufacturing is not an easy or simple matter to start overnight, the automotive sector is large and extensive, intertwined with companies that manufacture spare parts and car accessories, subcontracting companies, and other businesses.
All of these requirements are not available in Algeria, at least not on the scale needed to create a true automotive industry.
The Algerian government’s support for local spare parts manufacturing is a good thing, but it requires a long time, significant effort, and significant expense. This will not provide new cars for Algerian citizens in the short term.
What is the solution to lower car prices in Algeria?
The only solution is to open up imports and allow the entry of a large number of new cars, according to some analysts, at least one million cars must be imported to meet the very high demand, as Algeria has witnessed a ban on car imports in recent years.
Under Algerian president Abdelmadjid Tebboune, imports were only permitted once, and then re-imposed a ban on imports, this is unusual in a country like Algeria that does not manufacture cars or spare parts.
Successive ministers of industry have all failed miserably in finding a radical solution to Algeria’s automobile problem, they all agreed on the need to manufacture cars locally, without allowing the import of new, pre-owned vehicles.
This is illogical, given that the Algerian market is not a large market and is not a preferred global destination for automobile companies.
What is the future of the automobile market in Algeria?
The truth is, no one can predict what the future will look like, but it will not be bright based on current data.
Optimism will not change the dire situation: imports are banned without any convincing reason, and new cars are almost completely absent, with the exception of Fiat cars, which are still far from meeting customer demand, which has exceeded the capacity of its factory in Oran.
Algeria is moving toward building factories to assemble certain models, similar to what Egypt is doing. There will be no real automotive industry, as the Algerian government claims. The announced investment figures indicate that the factories will be assembly shops only, with some parts manufactured locally.
Buying a car in Algeria is a risk, as most cars are old and have fake odometers. Original spare parts are scarce and expensive, if available. Furthermore, the condition of the roads is disastrous and unsafe to drive. This means you’ll pay a lot of money to get into a lot of trouble.
