UPDATE 1-Renault may sign Algeria factory deal-source

Fri Apr 27, 2012 12:50pm EDT

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PARIS, April 27 (Reuters) - French automaker Renault may sign an agreement in early May to build a factory in Algeria, an industrial source told Reuters on Friday.

"In Algeria, the signature on an agreement could come in early May," the source said on condition of anonymity, citing the sensitive nature of the automaker's months-long intermittent talks with the Algerian government.

Chief Executive Carlos Ghosn had confirmed the ongoing discussions on Feb. 9 on the sidelines of a ceremony to inaugurate a plant in neighboring Morocco.

A Renault spokeswoman declined to comment beyond confirming that talks on the plant were still underway.

Trade restrictions mean that the newly opened Moroccan plant cannot supply the Algerian auto market, which amounted to some 400,000 vehicles last year.

French online newspaper La Tribune reported on Friday that the talks were stalling over government demands concerning the location of the proposed plant and the marketing of vehicles. (Reporting By Gilles Guillaume, Editing by Leila Abboud)

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