PIF and Hyundai Motor Company Forge Partnership for New Auto Manufacturing Plant in Saudi Arabia
Riyadh, October 22, 2023 – The Public Investment Fund (PIF) and Hyundai Motor Company (Hyundai) have officially inked a momentous joint venture agreement to establish a state-of-the-art, highly automated vehicle manufacturing facility in Saudi Arabia.
Under this agreement, PIF will command a substantial 70% stake in the newly formed joint venture, with Hyundai retaining the remaining 30%. Hyundai role extends beyond a financial one; they will serve as a pivotal strategic technology partner, lending their expertise to foster the development of this cutting-edge manufacturing plant. The total investment earmarked for this visionary project is estimated to surpass the impressive milestone of $500 million.
This landmark partnership, unveiled at the Saudi-Korean Business Forum, is set to be a game-changer in the automotive landscape. The primary objective of this initiative is to produce a staggering 50,000 vehicles annually, encompassing both internal combustion engine (ICE) and electric vehicles (EV). The groundbreaking ceremony for the plant is tentatively scheduled for 2024, with production slated to commence in 2026.
This innovative manufacturing facility is not just about cars; it’s about generating countless job opportunities and facilitating the transfer of knowledge and expertise. By localizing the production of Hyundai vehicles, the project is poised to accelerate the growth of Saudi Arabia’s automotive and mobility ecosystem, while concurrently attracting further investments, bolstering the sector, and having a ripple effect on the broader economy.
For PIF, this partnership represents another stride towards establishing Saudi Arabia as a global automotive powerhouse. It also exemplifies their commitment to usher in transformation within the sector, boost manufacturing capabilities, and fortify infrastructure and supply chains both within the nation and beyond. In addition to this momentous endeavor, PIF has recently announced the launch of Tasaru, the National Automotive and Mobility Investment Company, dedicated to the localization of automotive supply chains and manufacturing capacities. Furthermore, the collaboration between PIF and Saudi Electricity Company has given birth to the Electric Vehicle Infrastructure Company, with plans to install more than 5,000 electric car fast-charging stations throughout Saudi Arabia by 2030.
Hyundai Motor Group, known as the world’s third-largest automaker in terms of sales volume, brings to the table a treasure trove of technical capabilities and expertise necessary for the design, development, and operation of this groundbreaking manufacturing plant.
This joint venture mirrors PIF’s dedication to creating national and regional champions, thereby nurturing local capacities, attracting cutting-edge technology, and generating highly skilled employment opportunities within Saudi Arabia’s automotive and mobility sectors. Moreover, PIF’s investments extend to localizing automotive component manufacturing in Saudi Arabia, thereby bolstering the automotive supply chain even further.
Yazeed A. Al-Humied, the Deputy Governor and Head of MENA Investments at PIF, expressed his enthusiasm, saying, “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 automotive and mobility value chain.”
Jaehoon Chang, President and CEO of Hyundai Motor Company, shared his optimism about the venture, stating, “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 this groundbreaking joint venture agreement is contingent upon obtaining the customary approvals from relevant authorities and meeting predefined conditions.
