Algeria Might Invest in Peugeot image

A diplomatic source said that the Algerian government might invest in PSA Peugeot Citroen.

According to the source the Algerian government is currently in talks with PSA Peugeot Citroen officials for an investment in the struggling automaker. The official announcement might be made next week during President Francois Hollande’s visit to Algeria.

“We are not commenting on this latest rumor,” Peugeot spokesman Pierre-Olivier Salmon said.

Recently Peugeot announced it will increase the number of job cuts to be made in France in 2014, to more than 10,000, including the 8,000 announced in June. If the investment will be made, this could impact Renault’s plan for a factory in the country.

In May Renault and Algeria signed an agreement to manufacture a new plant in the north African country, but misunderstandings have risen concerning the location of the plant. Renault said it would prefer a site in the suburbs of Algiers, which would mean fewer struggles to find qualified workers near the capital.

On the other hand Algerian officials were initially aiming towards the Mediterranean port of Jijel, located 350 kilometers east of Algiers, in order to boost regional development. In the end the government proposed two sites t choose from, Oran and Mostaganem.

“We’re still in discussion and the dossier is making progress,” a Renault spokeswoman said. “We’re still waiting to sign the final agreement in the framework of the memorandum we concluded in May.”