Hyundai and the Public Investment Fund (PIF) of Saudi Arabia have joined forces to establish a state-of-the-art automotive manufacturing plant in the country. This strategic collaboration was announced during the Saudi-Korean Business Forum, marking yet another company venturing into vehicle production in the kingdom, following Lucid Motors.
Under the agreement, the PIF will hold a majority stake of 70 percent in the new venture, while Hyundai will retain the remaining 30 percent. As a strategic technology partner, the South Korean automaker will provide technical and commercial support to facilitate the establishment of the manufacturing plant. The ambitious project is expected to require an investment exceeding $500 million.
The primary objective of this partnership is to produce 50,000 vehicles annually, including both internal combustion engines and electric vehicles. The plant’s operations are scheduled to commence in 2026, following its anticipated completion in 2024. However, before embarking on this venture, the joint venture must obtain the necessary approvals from relevant authorities.
Hyundai expressed its excitement about the potential of this collaboration to drive significant advancements in vehicle production and contribute to a sustainable and eco-friendly automotive future in the region. The partnership aims to create opportunities for innovation and environmental progress.
In August of this year, Hyundai made a substantial investment of $290 million in its Hyundai Motor Manufacturing Alabama (HMMA) plant to enhance production and strengthen its position in the SUV market. The investment primarily focused on tooling and equipment upgrades to facilitate the production of the new Santa Fe.
Additionally, in October 2022, Hyundai initiated the construction of Hyundai Motor Group Metaplant America (HMGMA) LLC’s new manufacturing plant at the Bryan County Mega site in Georgia. This significant $5.54 billion investment encompasses the construction of a dedicated all-electric vehicle factory and an EV battery gigafactory, involving Hyundai and its affiliate suppliers.
Saudi Arabia’s automotive industry currently includes 160 vehicle factories, as reported by Arab News. Out of these, 33 are dedicated to the production of parts, accessories, and engines, while 21 focus on vehicle manufacturing and structural components. The kingdom also operates 106 facilities specializing in the production of trailers, semi-trailers, and trucks.
Overall, the Hyundai-PIF joint venture sets the stage for a groundbreaking development in Saudi Arabia’s automotive sector. The collaboration aims to drive progress in vehicle manufacturing, promote innovation, and contribute to a sustainable future for the region.