المملكة: Urgent- A Korean Saudi partnership establishes the first integrated car factory in the Kingdom

A strategic partnership between the Public Investment Fund and the Korean “Hyundai Motor” company, resulted in laying the foundation stone for the first integrated factory of the company in the Kingdom, in the King Salman Car Industry Complex, in a move that embodies the Kingdom’s commitment to achieving the target of Vision 2030, and moving forward in the path of diversifying the economy and localizing advanced industries.
Production operations are scheduled to start in the fourth quarter of 2026, with an annual capacity of 50,000 cars, including internal combustion engines and electric cars.

Local manufacture

The partnership that started in December 2020 is one of the important pillars in the Kingdom’s efforts to develop the auto manufacturing sector, which reflects its commitment to providing an attractive investment environment and a competitive infrastructure capable of attracting major international companies in the auto industry.
The project comes as part of a broader vision, led by the Public Investment Fund to support the local industrial system, transfer knowledge, and enhance the integration of supply chains, to establish the Kingdom’s position as a global center for the auto industry, and contributes to building a diversified and sustainable economy.
The Minister of Industry and Mineral Resources, Mr. Bandar bin Ibrahim Al -Khar, took over the leadership of the strategic partnership file with the Korean Hyundai Group, by managing the direct relationship with the group and unifying the efforts of the relevant government agencies.
This is with the aim of creating the possible environment to attract one of the most prominent car manufacturers globally, as the National Center for Industrial Development, which chairs His Excellency its Board of Directors, initiated the company to attract the company within the initial talks, and link it to a strategic project and partnership with the Public Investment Fund, which later resulted in the signing of a memorandum of understanding to establish the first integrated factory for Hyundai in the Kingdom in December 2022.
In the context of the continuous efforts of the Minister to complete this partnership, he visited the “Hyundai Motor” factory in December 2023 on the sidelines of his official visit to the Republic of South Korea, where the company’s officials met, and discussed with them the stages of implementing the joint project agreement to establish a high -automated car manufacturing factory in the Kingdom.

Economic gains

The creation of the factory reflects the relationship that extends for more than four decades between the Kingdom and “Hyundai Motor”, during which the Saudi consumer confidence in the company’s products was strengthened, until it has achieved the second largest share in the Saudi market, and it is expected that the factory will contribute about (18.7) billion riyals in the Kingdom’s gross domestic product by 2045.
The factory will support the Kingdom’s goals in localizing industrial production, promoting local content, and developing the capabilities of the supply chain, and the local content and government content authority will work as a strategic partner to ensure the integration of locally manufactured cars into government purchases, and the factory keeps the Kingdom’s ambition to develop a competitive car industry covering the local demand in addition to supporting export to regional and global markets.
The King Salman Car Industry Complex in King Abdullah Economic City facilitates the goal of the national industry strategy to attract (3) to (4) car manufacturers able to produce more than (300) thousand vehicles annually in one place, where the “Hyundai Motor” facility joined the Lucid Motors and Sir manufacturers.

Industrial transformation

The Public Investment Fund continues its role as an essential enabled for the auto sector in the Kingdom, as it provides guided investments aimed at launching high opportunities for economic growth and providing job opportunities, as the Fund’s partnership with “Hyundai Motor” confirms its commitment to enhance the industrial transformation in the Kingdom, and its continuous support to transform the target of Vision 2030 into a tangible reality.
The decision of “Hyundai Motor” to invest in the Kingdom of Saudi Arabia reflects confidence in the strength and flexibility of the Saudi market, as well as the growing role of the Kingdom as a destination for advanced manufacturing, and this step will enable the company to better serve its customers within the Kingdom and the region, while contributing to a long -term sustainability and competitiveness of the auto sector in the Kingdom.
The establishment of the first factory in the Kingdom for the Korean company comes; With cooperative efforts for many government agencies and stakeholders from the private sector, including the Ministry of Industry and Mineral Resources, the National Center for Industrial Development, the Ministry of Energy, the Ministry of Finance and the Ministry of Economy and Planning, and it represents the beginning of a new era for the automotive industry in the Kingdom, where the global industry leaders, and the attracting quality investments contribute to converting the Kingdom into a pivotal center for the auto industry regionally and internationally.