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Tunisia joins Morocco in electric car industry

Tunisia has stepped up its efforts to establish a large investment base in the automotive industry, assembly and installation in the region, materialising its partnership with the German “Leoni” group.

Experts said that the frequent arrival of investments in Tunisia in the automotive industry, most recently the launch of the German Leoni Group, a new factory in the country, reflects the confidence of foreign investors in the business climate, which is starting to recover.

The new unit will be dedicated to the production of electric vehicle components. Tunisia will join Morocco, which signed an agreement last December with China’s BYD Group to set up an electric car factory in Tangier, the first of its kind in Africa.

Prime Minister Youssef Chahed this week laid the foundation stone for the plant, in Menzel Hayat town in Monastir, with an investment of 200 million dinars ($ 81 million).

The project is expected to provide 5,000 jobs, including 1,000 jobs for university graduates, in line with the government’s strategy to reduce high unemployment rates.

“The project is proof of the return of foreign investors’ confidence in the business climate and infrastructure that is developing steadily,” Chahed said after the inauguration of the project.

He stressed the government’s commitment to develop the investment sector and simplify all the administrative complexities faced by investors, as one of the strategic engines to drive growth and export increases.

The foreign direct investment in the country jumped by 27 percent in the first quarter of this year, compared to an annual comparison. Data from the Foreign Investment Promotion Agency (FIPA) amounted to 560 million dinars (230.54 million dollars).

Currently, Leoni is manufacturing traditional car cables, but the new unit, which will start production in October, will produce components for electric cars.

The new unit, which will be built in the industrial area of Ras al-Marj in Monastir on an area of 10 hectares, hopes to produce cables for about 1,700 cars a day.

Mohamed Larbi Rouissi, general manager of the company’s branch in Tunis, says the value of exports to the factories is $ 552.3 million annually.

Exports of the new unit is expected to reach $ 300 million annually and will be exported to Germany, France and Italy, he said.

Leoni currently has five plants, two units of which are in Mater, Bizerte, and three units in Sousse, one of which is currently under construction in Sidi Bouali, providing 16.5 thousand jobs.

Tunisia is seeking to attract foreign investors in the automotive industry to allow the promotion of the sector, work on the transfer of technology and provide a skilled workforce and give the local investment destination the elements of competitiveness and attractiveness in the coming years.

Tunisia signed an agreement last September with Ukraine’s ZAZ to build a 100-hectare plant in Bizerte. The value of the project’s investment was not disclosed.

“The plant, to be built, will provide about 8,000 jobs and will produce about 100,000 cars a year,” said Majdi Ben Mahmoud, executive director of Tunisian Saada company responsible for promoting cars and trucks with the ZAZ brand.

ZAZ is the latest company to enter the Tunisian car market after Peugeot and China Triumph International Engineering, the Chinese company, are waiting for the official announcement of Volkswagen’s entry into the country.

A week earlier, Peugeot-Citroen CEO Jean-Philippe Imparato announced, after a meeting with Chahed, the re-marketing of Peugeot 404 cars, after a quarter-century absence in the country.

“The new plant will be completed within the first six months of 2018,” Imparato said in a press statement.

During the International Investment Conference (Tunisia 2020) in November 2016, Tunisia’s Stafim company signed a memorandum of understanding with the French company on the establishment of the plant.

The Chinese group, China’s largest industrial company, signed an agreement last July with the Tunisian CACTO Group to set up two factories, one for automobile glass and the other for engines, in Sfax.

The German giant set competition between North African countries when the group unveiled in February 2017 its intention to build a factory to install its cars in Tunisia, to be the third factory in the region after its unit in Morocco in addition to the plant to be built in Algeria.

Tunisia is betting that it will become an industrial hub in North Africa’s automotive component industry due to promising investment opportunities driven by the strong support of its partners as the industry is rapidly growing.

The Tunisian government says many Asian car makers voicerd wish to set up car manufacturing units in Tunisia.

The government intends to build a logistics zone with a large port for the export of cars, but the location of its construction has not yet been agreed upon.

A study carried out by the Tunisian-German Chamber of Industry and Commerce in collaboration with the private sector and with the support of the Ministry of Industry, confirmed that the region will be a key hub for the development of a roadmap for the automobile industry in Tunisia.

Official data confirm that the sector has developed significantly as its exports in the last ten years jumped from $ 41 million a year to $ 2.45 billion a year.

The sector provides 80,000 jobs and is active in about 200 companies, two thirds of which are foreign companies. Tunisia aspires to raise these rates in the coming years.

It also plans to move to the auto industry and not just to assembly on the basis that the economic integration rate of economic activity reached nearly 40 percent.

TunisianMonitorOnline –MNHN – (Translated from Al-Arab, article written by Riadh Bouazza) 

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