In a groundbreaking development aimed at transforming Saudi Arabia’s automotive landscape, the Public Investment Fund (PIF) and Hyundai Motor Company (Hyundai) have officially signed a joint venture agreement to establish a highly automated vehicle manufacturing plant within the kingdom’s borders.
PIF, Hyundai joint venture
The joint venture, unveiled at the Saudi-Korean Business Forum, comes as a result of the PIF’s strategic efforts to elevate Saudi Arabia as a global automotive player and drive major transformation in the sector.
The two entities are set to pool their resources, with PIF holding a commanding 70 per cent stake in the partnership, while Hyundai retains the remaining 30 per cent.
Additionally, Hyundai will act as a strategic technology partner, offering technical and commercial expertise to support the development of the state-of-the-art manufacturing plant.
The project is expected to exceed $500m, signifying a significant commitment to bolstering Saudi Arabia’s automotive and mobility ecosystem.
The joint venture aims to manufacture 50,000 vehicles annually, encompassing both internal combustion engine (ICE) and electric vehicles (EV).
Construction of the new plant is scheduled to commence in 2024, with production operations expected to begin in 2026.
This forward-looking initiative is anticipated to generate thousands of job opportunities while facilitating the transfer of knowledge and expertise.
By localising Hyundai’s vehicle production, Saudi Arabia aims to accelerate the growth of its automotive sector, attract additional investments, and strengthen the national economy.
This partnership aligns with PIF’s recent establishment of Tasaru, the National Automotive and Mobility Investment Company, dedicated to localising automotive supply chains and manufacturing capabilities.
Furthermore, PIF, in collaboration with the Saudi Electricity Company, has announced plans to set up the Electric Vehicle Infrastructure Company, with the ambitious goal of installing over 5,000 electric car fast chargers across the nation by 2030.
As the third-largest automaker globally in terms of sales volume, Hyundai Motor Group is set to bring technical capabilities and expertise to design, develop, and operate the advanced vehicle manufacturing plant.
Yazeed Al-Humied, deputy governor and head of MENA Investments at PIF, expressed his optimism, 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. 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.”
The completion of the joint venture agreement is subject to obtaining customary approvals from the relevant authorities and satisfaction of conditions