Hyundai Motor Group and the Public Investment Fund (PIF) of Saudi Arabia have announced a strategic partnership to establish an advanced automotive manufacturing facility in Saudi Arabia. This joint endeavor follows in the footsteps of electric vehicle (EV) maker Lucid Motors, making Hyundai the latest automaker to venture into vehicle production in the oil-rich kingdom.
A Transformative Collaboration
The new venture will see the PIF holding a commanding 70% stake, with Hyundai maintaining the remaining 30%. As part of the partnership, Hyundai will act as a strategic technology partner, providing technical and commercial support to facilitate the establishment of the manufacturing plant. The projected investment for this transformative project is expected to exceed $500 million.
The primary goal of this collaboration is to produce 50,000 vehicles annually, encompassing both internal combustion engines and electric vehicles. The plant’s commencement is scheduled for 2024, with production slated to begin in 2026, pending customary approvals from the relevant authorities.
Hyundai’s Commitment to Innovation
Hyundai Motor Group has been actively expanding its manufacturing capabilities and investing in the future of the automotive industry. This joint venture with the PIF is another significant step towards fostering a sustainable and eco-friendly automotive future in the region.
In August of this year, Hyundai made a substantial investment of $290 million at its Hyundai Motor Manufacturing Alabama (HMMA) plant to bolster production and enhance its standing in the SUV market. A significant portion of this investment, $190 million, has been allocated for tooling and equipment upgrades to support the production of the new Santa Fe.
Additionally, Hyundai initiated the construction of Hyundai Motor Group Metaplant America (HMGMA) LLC’s new manufacturing plant at the Bryan County Mega site in Georgia in October 2022. This massive $5.54 billion investment by the company and its affiliate suppliers includes the establishment of a dedicated all-electric vehicle factory and an EV battery gigafactory.
Saudi Arabia’s Automotive Industry
Saudi Arabia’s automotive industry currently operates 160 vehicle factories, according to an article from Arab News. Among these factories, 33 are dedicated to the production of parts, accessories, and engines, while 21 focus on vehicle manufacturing and structural components. Additionally, 106 facilities are geared towards the production of trailers, semi-trailers, and trucks.
The establishment of the Hyundai-PIF joint venture will further strengthen Saudi Arabia’s position as a hub for automotive manufacturing in the Middle East. This aligns with Saudi Crown Prince Mohammed bin Salman’s plans to diversify the country’s oil-dependent economy by developing a domestic auto industry.
The Road Ahead
Hyundai’s decision to partner with the PIF and invest in a manufacturing plant in Saudi Arabia demonstrates the brand’s commitment to innovation and environmental progress. By producing a mix of internal combustion engine cars and electric vehicles, Hyundai aims to meet the evolving demands of the market and contribute to a sustainable automotive future.
As the joint venture progresses, it will create thousands of jobs and facilitate the transfer of knowledge and expertise in automotive manufacturing. With the groundbreaking of the plant expected in 2024, Saudi Arabia is well on its way to achieving its goal of manufacturing more than 300,000 cars annually by 2030.
The partnership between Hyundai and the PIF represents a significant milestone in the development of Saudi Arabia’s automotive industry. With Hyundai’s expertise and the PIF’s investment, the joint venture is poised to make a lasting impact on the region’s economy and the future of mobility.