Hyundai Motor Company is building a joint automobile assembly plant in Saudi Arabia and is seeking to secure its first production base in the Middle East.
Hyundai Motor Company announced on October 22 (local time) that it signed a joint venture agreement with Saudi Arabia’s Sovereign Wealth Fund (PIF) to establish a CKD (Complete Knock Down) plant at the Fairmont Hotel in Riyadh, Saudi Arabia.
The contract signing ceremony held at the Korea-Saudi Investment Forum was attended by Hyundai Motor Group Chairman Chung Eui-sun, Hyundai Motor Company President Jang Jae-hoon, PIF President Yasir Osman Al-Rumaiyaan, and PIF Vice President Yazid Alhumied.
Under this contract, Hyundai Motor Company and PIF will build a CKD joint factory capable of producing 50,000 units per year in King Abdullah Economic City (KAEC), Saudi Arabia.
The joint venture plant is scheduled to begin construction in the first half of 2024 and begin mass production in the first half of 2026 and will be equipped to produce a variety of vehicle types, including both electric vehicles and internal combustion engine vehicles.
Hyundai Motor Company and PIF plan to jointly invest more than $500 million in the construction of a joint factory, and the South Korean carmaker will hold a 30% stake in the factory and PIF will hold a 70% stake.
KAEC, where the factory will be built, is a planned city in the western region of Saudi Arabia, about 100km away from Jeddah, the second largest city in Saudi Arabia and the largest trade port. It is emerging as the center of the Middle East’s automobile industry, with recent investments in the electric vehicle industry and automobile parts companies moving in.
Saudi Arabia is carrying out the national development project ‘Saudi Arabia Vision 2030’ with the goal of reducing dependence on the oil industry and developing various growth engines, and is also actively promoting the development of the automobile industry as part of the project.
Hyundai plans to apply highly automated processes and regionally customized facilities to its joint venture plant in Saudi Arabia. We plan to gradually expand the product lineup and develop it into a central production base in the Middle East and North Africa.
Jaehoon Jang, President of Hyundai Motor Company, said, “Hyundai Motor Company’s joint venture plant in Saudi Arabia will lead to groundbreaking developments in electric vehicle production technology and contribute to the creation of a sustainable, eco-friendly automobile industry in the region.” He added, “The cooperation between Hyundai Motor Company and PIF on electric vehicle technology is innovative.” “We expect to create environmentally friendly opportunities.”
