PARIS -- Renault opened a new factory in Algeria as part of its plans to take advantage of fast growth in North African markets.
The plant is building the New Symbol sedan, a low-cost model based on the automaker's Dacia platform.
Algeria is Renault's tenth-largest market, where it is the biggest carmaker with a 25.5 percent market share, according to the group. Renault makes almost half of its sales outside Europe.
Some 425,000 vehicles were sold in Algeria in 2013, making it the continent's second-largest automotive market behind South Africa. The market has contracted in 2014 with just over 265,000 vehicle sales through September, but its potential remains high, Renault says, because the 3 million vehicles currently on the country's roads are on average 16 years old.
"In the medium term, I think it's a market that can exceed 500,000 units a year," Guillaume Josselin, Renault's sales chief in Algeria, said during a conference call.
Renault's low-cost cars and emerging market presence helped it ride out a six-year European auto slump that ended last year. But the company is now facing weakening currencies and demand in many of the same overseas markets.
It sees further growth potential in Algeria, however, where 70 percent of the cars on the road are more than 10 years old and the ownership rate is 100 vehicles per 1,000 inhabitants, compared with 500 in western Europe.
Renault said the factory has one production line with an annual capacity of 25,000 vehicles. A second phase to increase production to 75,000 vehicles a year is under consideration, the company said in a statement.
The plant is in Oran on the northwestern Mediterranean coast of Algeria. It is Renault's first in the country since it exited the market after Algeria gained independence from France in 1962.
Renault owns 49 percent of the plant and has made an initial investment of 50 million euros ($62 million). It has hired nearly 350 staff and some of the new employees have been trained at Renault-Nissan alliance plants, including in Romania.
The factory is building the Symbol from completely knocked down production (CKD) for the local market. Renault said the Symbol will offer a high level of equipment and will be the first vehicle in the country to feature a GPS navigation system.
Renault, which has two factories in Morocco, aims to boost sales in the North African markets of Morocco, Algeria, Egypt and Tunisia, where new-car sales are expected to increase to 880,000 units in 2015 from 759,000 units in 2012, according to IHS Automotive.
Reuters contributed to this report