May 23, 2024

Saudi Arabia’s New High-tech Car Manufacturing Plant

_manufacturing plant

_manufacturing plant

Last Updated on March 19, 2024 by newseditor

Saudi Arabia is set to start to have more high-tech car manufacturing plants. Several weeks ago, Lucid Air, the 2023 World Luxury Vehicle Award winner, officially launched Saudi Arabia’s first-ever car production facility in Saudi Arabia. The facility, which is Lucid’s first overseas factory and second Advanced Manufacturing factory (AMP-2), will manufacture the company’s ground-breaking electric cars for Saudi Arabia and sell them to other countries.

More recently, the Public Investment Fund (PIF) and Hyundai Motor Company (Hyundai) have formally signed an agreement to open a cutting-edge, highly automated vehicle manufacturing facility within the kingdom’s borders. 

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The Partnership

This joint venture, which was unveiled during the Saudi-Korean Business Forum, is a major result of the Public Investment Fund’s (PIF) strategic efforts to establish Saudi Arabia as a major participant in the global automotive sector to bring about a significant transition to the sector.

The partnership comprises a resource-sharing structure in which Hyundai has a thirty percent stake, and PIF holds the majority of seventy percent. Hyundai will also operate as a key technological partner, offering commercial and technical know-how to help with the establishment of an advanced manufacturing facility.

With a scope of over $500 million, the project represents a major investment to strengthen the automotive and transportation ecosystem in Saudi Arabia. The joint venture intends to produce 50,000 automobiles a year, including both electric and internal combustion engine (ICE) vehicles (EV).

The new plant’s construction is to start in 2024. Production of cars is expected to start in 2026. It is anticipated that this project would facilitate the transfer of information and experience while generating thousands of employment possibilities.

Saudi Arabia hopes to boost the national economy, draw in more investments, and accelerate the expansion of its automotive industry by bringing Hyundai’s car manufacturing domestically. This collaboration is in line with PIF’s recent founding of Tasaru, the National Automotive and Mobility Investment Company, which is tasked with bringing automotive production and supply chains closer to home.

Furthermore, in collaboration with the Saudi Electricity Company, PIF has announced plans to establish the Electric Vehicle Infrastructure Company, with the ambitious goal of installing over 5,000 electric car fast chargers nationwide by 2030.

As the third-largest automaker globally in terms of sales volume, Hyundai Motor Group will contribute technical capabilities and expertise to design, develop, and operate the advanced vehicle manufacturing plant.

Yazeed Al-Humied, the Public Investment Fund’s Deputy Governor and Head of MENA Investments, expressed optimism, stating that the company’s collaboration with Hyundai marks yet another important turning point in effectively supporting and propelling the expansion of Saudi Arabia’s automotive industry. Al-Humied said that the Hyundai Motor Company’s investment in car production is a significant turning point that closely relates to PIF’s current holdings in Lucid and Ceer Motors. Also, the partnership expands the scope of Saudi Arabia’s mobility and automotive value chain. 

The completion of the requirements and customary permissions from the appropriate authorities are prerequisites for the joint venture agreement to be finalized.

Takeaway

PIF’s and Hyundai Motor Group’s partnership increases the car manufacturing plant in Saudi Arabia. Existing car manufacturers in the country include Lucid Group.

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