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RIYADH, 25October 2023: In a groundbreaking partnership, the Public Investment Fund (PIF) and Hyundai Motor Company are set to establish a state-of-the-art automotive manufacturing plant in Saudi Arabia. This joint venture signifies a significant step in the development of the Saudi automotive industry and holds great promise for the region.
The Joint Venture Agreement
The PIF and Hyundai have recently signed a joint venture agreement, with PIF taking a substantial 70% stake and Hyundai holding the remaining 30%. Hyundai will play a pivotal role as a strategic technology partner, offering technical and commercial support for the new manufacturing plant. The total investment for this project is estimated to exceed USD 500m, highlighting the magnitude of this endeavor.
Vision and Production Capacity
This joint venture, announced at the Saudi-Korean Business Forum, has a visionary objective: to produce 50,000 vehicles annually. This production includes both internal combustion engine (ICE) and electric vehicles (EV). The groundbreaking of the plant is scheduled for 2024, and production is anticipated to commence in 2026.
Economic Impact and Expertise Transfer
The establishment of this manufacturing plant is not only about automobiles but also about economic growth. It will generate new job opportunities and foster knowledge and expertise transfer. Moreover, the localization of Hyundai’s vehicles will contribute to the development of Saudi Arabia’s automotive and mobility ecosystem, paving the way for further investments in the sector and the broader economy.
Elevating Saudi Arabia’s Automotive Industry
This partnership aligns with PIF’s efforts to position Saudi Arabia as a prominent player in the global automotive industry. It aims to bring about a transformative shift in the sector, bolster manufacturing capabilities, enhance infrastructure, and fortify supply chains, both within Saudi Arabia and internationally.
In a significant move, PIF recently introduced Tasaru, the National Automotive and Mobility Investment Company, dedicated to localizing automotive supply chains and manufacturing capabilities. Additionally, PIF and the Saudi Electricity Company announced the Electric Vehicle Infrastructure Company, with plans to install over 5,000 electric car fast chargers across Saudi Arabia by 2030.
Hyundai’s Technical Prowess
As the third-largest automaker worldwide in terms of sales volume, Hyundai Motor Group brings invaluable technical capabilities and expertise to the table. These strengths will be harnessed to design, develop, and operate the vehicle manufacturing plant, ensuring it meets the highest standards of quality and innovation.
Building Local and Regional Champions
The joint venture is a testament to PIF’s commitment to creating national and regional champions in the automotive industry. By nurturing local capabilities, attracting cutting-edge technology, and generating highly skilled jobs in Saudi Arabia’s automotive and mobility sectors, PIF is actively contributing to the growth and transformation of the sector.
Vision for Sustainability
Yazeed Al-Humied, Deputy Governor and Head of MENA Investments at PIF, expressed the significance of this partnership, stating that it aligns with PIF’s focus on fostering growth in Saudi Arabia’s automotive ecosystem. The investment with Hyundai Motor Company is a pivotal milestone that amplifies the breadth of Saudi Arabia’s automotive and mobility value chain.
Jaehoon Chang, President and CEO of Hyundai Motor Company, shared his excitement about the venture’s potential to drive advancements in vehicle production while fostering a sustainable and eco-friendly automotive future in the region. The collaboration between PIF and Hyundai is expected to create opportunities for innovation and environmental progress.
Conclusion
The joint venture between the Public Investment Fund and Hyundai Motor Company signifies a new era for the Saudi automotive industry. With a focus on innovation, sustainability, and economic growth, this partnership has the potential to transform the region’s automotive landscape and position Saudi Arabia as a significant player on the global stage. Stay tuned for further updates on this exciting endeavor.
