Hyundai Motor Company has entered into a joint venture agreement with the Public Investment Fund (PIF) of Saudi Arabia to establish “a highly automated vehicle manufacturing plant,” in the kingdom. Hyundai to lead as as strategic technology partner.
As the third-largest automaker globally in terms of sales volume, Hyundai Motor Group will bring unparalleled technical capabilities and expertise to design, develop and operate this new vehicle manufacturing plant. Their involvement is expected to elevate the quality and standards of production in the region.
The joint venture will aim to manufacture 50,000 vehicles annually, across both ICE and EV footprints. Groundbreaking for the plant is scheduled for 2024, with production anticipated to commence in 2026.
The total investment for the venture is estimated to exceed $500m, with PIF holding a majority 70% stake and Hyundai the remaining 30%. The OEM has been designated as strategic technology partner to the project and will provide important technical and commercial support.
The localisation of Hyundai’s vehicles is expected to catalyse the development of Saudi Arabia’s automotive and mobility ecosystem, further attracting investments in the sector and the broader economy. For PIF, the partnership represents the latest in a series of initiatives to establish Saudi Arabia as a global automotive player, seeking to transform the sector while enhancing manufacturing capabilities, infrastructure and supply chains both domestically and internationally.
“Our investment in vehicle manufacturing with Hyundai Motor Company is a pivotal milestone.” - Yazeed A. Al-Humied, Deputy Governor and Head of MENA Investments at PIF
In a related move, PIF recently launched Tasaru, the National Automotive and Mobility Investment Company, dedicated to the localisation of automotive supply chains and manufacturing capabilities. PIF has also partnered with the Saudi Electricity Company to establish the Electric Vehicle Infrastructure Company, with plans o install over 5,000 EV fast chargers throughout the region by 2030.
Yazeed A. Al-Humied, Deputy Governor and Head of MENA Investments at PIF, commented: “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’s automotive and mobility value chain.”
Jaehoon Chang, President and CEO of Hyundai Motor Company, added: “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 potentially historic joint venture agreement is contingent upon obtaining customary approvals from relevant authorities and satisfaction of the stipulated conditions.