RIYADH, Saudi Arabia and SEOUL, South Korea, Oct. 23, 2023 /PRNewswire/ -- The Public Investment Fund (PIF) and Hyundai Motor Company (Hyundai) have announced the signing of a joint venture agreement to establish a highly automated vehicle manufacturing plant in Saudi Arabia.
(from left) Euisun Chung, Executive Chair, HMG; Kyungho Choo, Deputy PM and Minister of Economy and Finance; Moon Kyu Bang, Minister of Trade, Industry and Energy; Jaehoon Chang, President and CEO, Hyundai Motor Company; Suk Yeol Yoon, President, Republic of Korea; Yazeed A. Al-Humied, Deputy Governor and Head of MENA Investments, PIF; Khalid Al-Falih, Minister of Investment of Saudi Arabia; Bandar Ibrahim AlKhorayef, Minister of Industry and Mineral Resources; Yasir Al-Rumayyan, Governor, PIF
PIF will hold a 70% stake in the new joint venture with Hyundai holding the remaining 30%. Hyundai will also act as a strategic technology partner to support the development of the new manufacturing plant, by providing technical and commercial assistance. The total investment for the project is estimated to exceed $500 million.
The joint venture announced at the Saudi-Korean Business Forum, aims to manufacture 50,000 vehicles per year, including both internal combustion engine (ICE) and electric vehicles (EV). The plant groundbreaking is planned for 2024, and production is expected to begin in 2026.
The new manufacturing plant will create new jobs and allow for knowledge and expertise transfer. The localization of Hyundai's vehicles will accelerate the development of Saudi Arabia's automotive and mobility ecosystem and attract further investments to the sector and the wider economy.
The partnership is PIF's latest initiative to elevate Saudi Arabia as a global automotive player, drive transformation in the sector, and boost manufacturing capabilities, infrastructure and supply chains in Saudi Arabia and beyond. Among the major investments in the sector, PIF announced recently the launch of Tasaru, the National Automotive and Mobility Investment Company, which is dedicated to localizing automotive supply chains and manufacturing capabilities. In addition, PIF and Saudi Electricity Company announced the Electric Vehicle Infrastructure Company, with plans to install over 5,000 electric car fast chargers across Saudi Arabia by 2030.
As the third largest automaker worldwide in terms of sales volume, Hyundai Motor Group brings invaluable technical capabilities and expertise to design, develop, and operate the vehicle manufacturing plant.
The joint venture also underscores PIF's efforts to create national and regional champions, building local capabilities, attracting cutting-edge technology, and creating highly skilled jobs in Saudi Arabia's automotive and mobility sectors. PIF's investments are also localizing automotive component manufacturing in Saudi Arabia, further strengthening the automotive supply chain.
Yazeed Al-Humied, Deputy Governor and Head of MENA Investments at PIF, said: "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, 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."
