PIF and Hyundai join for advanced vehicle manufacturing in Saudi Arabia
Riyadh, October 22, 2023, The Public Investment Fund (PIF) and Hyundai Motor Company have officially inked a collaborative agreement to establish a state-of-the-art vehicle manufacturing facility in Saudi Arabia, marking a significant step in the nation's automotive industry development.
This joint venture will see PIF holding a substantial 70% stake, with Hyundai assuming the remaining 30%. In addition to its financial involvement, Hyundai will play a pivotal role as a strategic technology partner, offering essential technical and commercial support for the plant's development. The total investment for this ambitious project is projected to exceed $500 million.
Announced during the Saudi-Korean Business Forum, the venture is set to produce around 50,000 vehicles annually, encompassing both internal combustion engine (ICE) and electric vehicles (EV). The groundbreaking ceremony for the facility is slated for 2024, with production operations expected to commence by 2026.
Beyond the economic impact, the manufacturing plant is poised to generate thousands of jobs, while also facilitating knowledge and expertise transfer. This localization of Hyundai's vehicles will serve as a catalyst for the growth of Saudi Arabia's automotive and mobility ecosystem, attracting further investments into the sector and the broader economy.
For PIF, this partnership underscores its commitment to elevating Saudi Arabia's position as a global automotive player, fostering transformation in the sector, and enhancing the nation's manufacturing capabilities, infrastructure, and supply chains. Notably, PIF recently launched Tasaru, the National Automotive and Mobility Investment Company, dedicated to localizing automotive supply chains and manufacturing capabilities. Furthermore, in conjunction with the Saudi Electricity Company, they announced the Electric Vehicle Infrastructure Company, aiming to install over 5,000 electric car fast chargers across Saudi Arabia by 2030.
As the world's third-largest automaker in terms of sales volume, Hyundai Motor Group's involvement brings invaluable technical expertise to design, develop, and operate the manufacturing plant.
This joint venture embodies PIF's broader initiatives to establish national and regional champions, boost local capabilities, attract cutting-edge technology, and create highly skilled jobs in Saudi Arabia's automotive and mobility sectors. PIF's investments are further reinforcing the automotive supply chain by localizing component manufacturing in Saudi Arabia.
Yazeed A. Al-Humied, Deputy Governor and Head of MENA Investments at PIF, stated, "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."
Hyundai Motor Company's President and CEO, Jaehoon Chang, expressed enthusiasm about the venture's potential to drive substantial advancements in vehicle production and foster a sustainable and eco-friendly automotive future in the region, highlighting the opportunities it presents for innovation and environmental progress.
The finalization of the joint venture agreement is subject to customary approvals from relevant authorities and meeting specified conditions.