French carmaker Renault is in talks to build a plant in Algeria, reviving a stalled plan to tap growing demand, local media reported an Algerian minister as saying on Thursday.
Renault plans to produce 75,000 cars per year from 2012 for the north African country, Algerian Industry and Investment Promotion Minister Mohamed Benmeradi was quoted as saying by several newspapers.
"The discussions concern the creation, in the first stage, of an assembly plant, which will be followed in a second stage by vehicle manufacturing," El Watan newspaper cited him as saying.
"Renault has offered to supply its (locally assembled) vehicles to the Algerian market by 2012."
Benmeradi made the comments on Wednesday before a meeting with former French Prime Minister Jean-Pierre Raffarin who was visiting Algiers in his capacity as President Nicolas Sarkozy's special envoy.
Renault and the Algerian government have been in discussions over a factory for several years. In February, Renault Chief Operating Office Patrick Pelata said talks were "well advanced".
Since then, the talks have stalled. Algerian government sources said this year officials were not happy with the amount Renault planned to invest, felt local partners were not sufficiently involved, and wanted the factory to export vehicles if it had surplus capacity.
El Watan quoted Raffarin as saying Renault has "changed the scale of its project and redefined a number of characteristics."
Renault operates a car plant in neighbouring Morocco and is building a second production complex there.
Algeria imported 67,791 vehicles in the first half of this year, according to official figures. Renault says it sold 56,089 vehicles in Algeria in 2009 and has a 23.5 percent market share.
Energy exporter Algeria, in an attempt to improve its trade balance, has imposed tough restrictions on vehicle imports including a ban on consumer credit for buying cars.
As part of a shift towards economic nationalism, it has introduced a 49 percent ceiling on foreign ownership of businesses registered there.