VW Suspends Production In Algeria Amid Political Crisis, Corruption Charges For JV Partner

Volkswagen Group’s production planners and managers are having a tough time these days as the carmaker does not seem to have made the best choices for plant locations recently.

Following the controversy surrounding the allocation of a new assembly plant to Turkey and the subsequent suspension of those plans caused by the Turkish military’s invasion of Syria, VW’s plant in Algeria has now come under fire.

Citing German press agency DPA, Automobilwoche reports that the automaker has temporarily suspended production at the assembly plant due to the tense political situation in the North African country. In addition, deliveries of assembly kits to VW’s joint venture partner in Algeria, SOVAC, have also been suspended.

Related: VW Chairman On Turkey Factory: “We Won’t Build A Plant Next To A Battlefield”

The VW and SOVAC-operated plant in Algeria started building Volkswagen, Skoda and SEAT models in 2017

The country has been seeing mass protests against the political leadership since February. The political crisis aggravated last week when presidential elections were accompanied by mass protests and riots.

Protesters accuse the power elite around the military and the resigned president Abdelaziz Bouteflika of manipulating the election. In recent weeks and months, many activists and business leaders have been arrested, culminating with long prison sentences on corruption charges for several former ministers just days before the election.

While all this unstable political climate is a good enough reason for VW to suspend its activities in the country, things are probably more complicated than that. That’s because the managing director of VW’s joint venture partner SOVAC, Mourad Oulmi, is among the arrested business leaders. Detained since June, he is awaiting trial on corruption charges. Mind you, Volkswagen said it is not aware of any investigations into its employees.

SOVAC has been VW Group’s official partner in Algeria for ten years. In 2016, the German giant opened an assembly plant in a joint venture with SOVAC. The facility built around 50,000 vehicles last year, including VW Golf, Skoda Octavia, VW Polo, SEAT Ibiza, Skoda Fabia, and VW Caddy.