VW Group signed a contract to form a new venture with Algeria’s SOVAC in order to produce select models locally.

Models like the VW Golf, Seat Ibiza, Skoda Octavia and the VW Caddy will be assembled in a new site, 136 miles (220km) to the west of Algiers, starting spring 2017.

VW executives Josef Baumert and Andreas Lauenroth signed the contract on behalf of the Group brands with Mourad Oulmi, CEO of SOVAC in the presence of the Algerian Minister of Industry Abdessellam Bouchouareb.

“For us, local assembly is an effective way of starting production in Algeria,” said Lauenroth. “We will be providing targeted training for local employees in quality, production and logistics at the European production facilities of our brands. This will enable us to reach “made in Europe” quality standards in Algeria.”

VW and SOVAC have been working together since 2001 as sales partners with VW saying that they’ve delivered 30,000 new cars with the help of SOVAC in 2015. Oulmi said that the new joint venture will help in reducing the cost of new cars in the country, with their plans to include exporting in the next few years.

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