Saudi Arabia’s PIF and Hyundai to Build $500 Million Car Plant in Kingdom
Exciting news in the automotive industry! Saudi Arabia’s Public Investment Fund (PIF) and Hyundai Motor Company are teaming up to establish a cutting-edge vehicle manufacturing plant in the Kingdom. This joint venture is set to make a significant impact on the region’s automotive sector.
PIF will hold a substantial 70% stake in this new venture, with Hyundai securing the remaining 30%. Hyundai, known for its technical prowess, will also serve as a strategic technology partner, contributing technical and commercial expertise to support the plant’s development.
The Project and Its Ambitions
This ambitious project carries an estimated investment of over $500 million. The goal of this joint venture, as announced during the Saudi-Korean Business Forum, is to produce an impressive 50,000 vehicles annually, encompassing both internal combustion engine (ICE) and electric vehicles (EV).
The groundbreaking for the manufacturing plant is scheduled for 2024, with full-scale production anticipated to commence in 2026. This initiative is not only about innovation but also about creating opportunities and fostering knowledge transfer.
Local Impact and Global Aspirations
The localization of Hyundai’s vehicles is expected to expedite the development of Saudi Arabia’s automotive and mobility ecosystem while attracting more investments to the sector and the broader economy. This partnership is PIF’s latest move to elevate Saudi Arabia as a global automotive player, driving transformation, and boosting manufacturing capabilities, infrastructure, and supply chains both within Saudi Arabia and beyond.
As part of its commitment to strengthening the automotive sector, PIF recently launched Tasaru, the National Automotive and Mobility Investment Company. This entity is dedicated to localizing automotive supply chains and manufacturing capabilities. Furthermore, PIF and Saudi Electricity Company unveiled the Electric Vehicle Infrastructure Company, aiming to install over 5,000 electric car fast chargers across Saudi Arabia by 2030.
Hyundai’s Technical Expertise
Hyundai Motor Group, ranked as the third largest automaker globally in terms of sales volume, brings invaluable technical capabilities and expertise to design, develop, and operate the vehicle manufacturing plant. This partnership underscores PIF’s efforts to create national and regional champions, bolster local capabilities, attract cutting-edge technology, and generate highly skilled jobs in Saudi Arabia’s automotive and mobility sectors.
Yazeed A. Al-Humied, Deputy Governor and Head of MENA Investments at PIF, expressed his enthusiasm, stating, “Partnering with Hyundai is another significant milestone for PIF in successfully enabling and accelerating the growth of Saudi Arabia’s automotive ecosystem—one of our 13 priority sectors. Our investment in vehicle manufacturing with Hyundai Motor Company is a pivotal milestone, aligning closely with our existing stakes in Lucid and Ceer Motors, and amplifying the breadth of Saudi Arabia’s automotive and mobility value chain.”
Jaehoon Chang, President and CEO of Hyundai Motor Company, added, “We are excited about the potential of this venture to drive significant advancements in vehicle production, fostering a sustainable and eco-friendly automotive future in the region. Our joint efforts will create opportunities for innovation and environmental progress.”
Stay Tuned for Further Developments
Please note that the completion of the joint venture agreement is subject to obtaining customary approvals from the relevant authorities and satisfaction of conditions. We will keep you updated on the progress of this exciting project.
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