Hyundai Motor, PIF ink $500m deal for automated vehicle plant in Saudi Arabia
A groundbreaking agreement has been solidified between the Public Investment Fund (PIF) of Saudi Arabia and Hyundai Motor Company (Hyundai), aiming to set up a state-of-the-art automated vehicle manufacturing facility in Saudi Arabia. With an anticipated investment surpassing $500 million, PIF will dominate a 70% ownership, leaving Hyundai with 30% and a pivotal role as a strategic technology associate.
Joint Venture Details: Production and Innovation
The partnership, unveiled at the Saudi-Korean Business Forum, has its sights on rolling out 50,000 vehicles annually, with a mix of internal combustion engine (ICE) and electric vehicles (EV). Paving the way for this initiative, a plant groundbreaking ceremony is on the agenda for 2024, with production firing up by 2026.
Saudi Arabia and Hyundai Motor to collaborate on next-gen vehicle manufacturing hub. Photo courtesy of Public Investment Fund.
Stimulating the Saudi Economy and Ecosystem
Projected to spawn thousands of job opportunities, the venture isn’t solely about production—it’s about the transfer of knowledge and skills. Hyundai’s vehicle localization will be a catalyst, propelling Saudi Arabia’s auto-mobility ecosystem forward and magnetizing more investments for both the sector and the broader economy.
Elevating Saudi Arabia’s Automotive Footprint
The alliance resonates with PIF’s ongoing endeavors to position Saudi Arabia as an automotive powerhouse on the global stage. With initiatives like Tasaru, the National Automotive and Mobility Investment Company, and collaborations like the Electric Vehicle Infrastructure Company, PIF demonstrates unwavering commitment to the sector. The latter, co-initiated with the Saudi Electricity Company, is poised to install 5,000+ electric car fast chargers across the nation by 2030.
Hyundai, boasting the title of the third-largest automaker globally based on sales volume, infuses the venture with unmatched technical prowess and industry insights. This partnership is a testament to PIF’s vision of fostering local champions, drawing in cutting-edge technologies, and nurturing a highly skilled workforce within Saudi’s auto-mobility arena.
Industry Insights and Commentary
Yazeed A. Al-Humied, the Deputy Governor and Head of MENA Investments at PIF, conveyed, “The Hyundai partnership is a landmark achievement for PIF, reinforcing our commitment to Saudi Arabia’s automotive ecosystem—one of our prioritized sectors. This alliance complements our ongoing engagements with Lucid and Ceer Motors, amplifying Saudi’s comprehensive auto-mobility value chain.”
On the other side of the partnership, Jaehoon Chang, Hyundai Motor Company’s President and CEO, expressed his enthusiasm, “This venture offers a unique opportunity for groundbreaking advancements in vehicle production, fostering a sustainable and environmentally-conscious automotive future in the region.”
The consummation of this joint venture, however, awaits approval from pertinent authorities and the fulfillment of requisite conditions.