Saudi Arabia's wealth fund and Hyundai Motors to construct $500 million auto plant
A shop sign of Hyundai is seen outside a car showroom.
In a move aimed at diversifying the oil-dependent economy, Hyundai Motor Co. has entered into an agreement with Saudi Arabia's sovereign wealth fund, the Public Investment Fund (PIF), to establish a car assembly plant worth over $500 million, according to a report by Bloomberg.
The report cited Park Jiwoo, from Hyundai’s external affairs team who indicated that this venture marks a significant step towards expanding the domestic auto industry, with plans to produce 50,000 vehicles annually. Further, Bloomberg cited her saying that the plant, situated at the King Abdullah Economic City near Jeddah, will be a joint effort, with PIF holding a 70 per cent stake, while Hyundai will retain the remaining 30 per cent.
The assembly plant, projected to commence operations in early 2026, is poised to cover an area spanning around 300,000 square meters. It will encompass the production of both electric vehicles (EVs) and traditional combustion engine cars, marking Hyundai's commitment to embracing emerging green technology while accommodating conventional market demands.
The ambitious project aligns with Saudi Crown Prince Mohammed bin Salman's vision of reducing the nation's reliance on oil revenue through diversification, with a focus on Jeddah as a key hub for the domestic automotive industry. PIF, a pivotal player in this initiative, has been at the forefront of this effort, having previously invested in the U.S.-based EV start-up Lucid Motors Inc. Their investment in Lucid led to the establishment of the company's first international facility in Saudi Arabia, showcasing the country's growing prominence in the electric vehicle sector.
Furthermore, PIF has ventured into the creation of its electric vehicle brand, "Ceer," while also making strategic international and domestic investments to secure essential metals and minerals needed to establish a robust supply chain for the burgeoning EV industry.
(With inputs from Bloomberg)
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