Hyundai Motor Company and the Public Investment Fund (PIF) of Saudi Arabia have signed a joint venture agreement to establish a vehicle manufacturing plant in Saudi Arabia. The plant, with a planned capacity of 50,000 vehicles per year, will produce both internal combustion and electric vehicles with Hyundai holding a 30 per cent stake in the venture.
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The plant is set to be built at an investment of over $ 500 million with groundbreaking at the planned site to happen in 2024. Both parties are eyeing a start of production date in 2026.
Representational image.
As per the press release, the new joint venture will help create employment as well as aid in transfer of technology. It will also allow Hyundai to localise its cars for the Saudi market and could aid in attracting future investment in the automotive space from other manufacturers.
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The joint venture represents PIF's latest endeavour to boost Saudi Arabia's automotive sector and elevate the country as a global player in the industry. The partnership aims to drive transformation, enhance manufacturing capabilities, and strengthen the automotive supply chain.
Speaking on the announcement, Jaehoon Chang, President and CEO of Hyundai Motor Company, said, “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.”
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Aside from the new joint venture, the PIF has taken several steps to boost the country's automotive industry, such as launching Tasaru, the National Automotive and Mobility Investment Company, which focuses on localising automotive supply chains and manufacturing capabilities. Additionally, PIF and Saudi Electricity Company have jointly established the Electric Vehicle Infrastructure Company, with plans to install more than 5,000 electric car fast chargers across Saudi Arabia by 2030.
The joint venture is still in its initial stages with customary approvals from relevant authorities still pending.
