Hyundai Motor secured a foothold in car manufacturing operations in the Middle East through the planned construction of a $500 million automated vehicle manufacturing plant in Saudi Arabia, the automaker said on Monday.
On Sunday (local time), Hyundai Motor signed a joint venture agreement with the Public Investment Fund (PIF), a Saudi Arabian sovereign wealth fund, to establish a complete knock-down (CKD) plant in King Abdullah Economic City, the center of the Middle Eastern country’s car industry.
King Abdullah Economic City is located 100 kilometers north of Jeddah, Saudi Arabia’s No. 2 city. CKD refers to the assembly of vehicles after being shipped to another country as kits.
The signing ceremony was held on the sidelines of the Saudi Arabia-Korea Investment Forum, attended by Hyundai Motor Group Executive Chair Chung Euisun, Hyundai Motor CEO Chang Jae-hoon, PIF Governor Yasir bin Othman Al-Rumayyan and PIF Deputy Governor Yazeed A. Al-Humied.
After groundbreaking in 2024, the new factory is expected to begin production in 2026 with an annual output of 50,000 automobiles per year, including both internal combustion engine and electric vehicles.
PIF will hold a 70 percent stake in the joint venture, while the Korean carmaker will own the remaining 30 percent.
Hyundai Motor said the new factory will be equipped with facilities tailored for the region. The carmaker plans to diversify the factory’s product lineup gradually and establish it as a manufacturing base for the Middle East and North Africa.
In addition, the new plant will create thousands of jobs and enable the transfer of production technology, according to Hyundai Motor. The localization of its vehicles is also expected to accelerate the development of Saudi Arabia’s automotive and mobility ecosystem and attract further investments to the sector and the wider economy.
President Yoon Suk Yeol, center, applauds during a ceremony for a joint venture agreement between Hyundai Motor and Saudi Arabia’s Public Investment Fund (PIF) at the Fairmont Hotel in Riyadh, Sunday (local time). From left are Hyundai Motor Group Executive Chair Chung Euisun, Deputy Prime Minister and Finance Minister Choo Kyung-ho, Minister of Trade, Industry and Energy Bang Moon-kyu, Hyundai Motor CEO Chang Jae-hoon, Yoon, PIF Deputy Governor Yazeed A. Al-Humied, PIF Governor Yasir bin Othman Al-Rumayyan and Saudi Arabian Investment Minister Khalid A. Al-Falih. Yonhap
“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,” the Hyundai Motor CEO said. “Our joint efforts will create opportunities for innovation and environmental progress.”
Saudi Arabia has been seeking to reduce its reliance on the petroleum industry and foster various growth engines for the future. The latest partnership is part of that plan.
“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,” the PIF deputy governor said. “Our investment in vehicle manufacturing with Hyundai Motor 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.”
The completion of the joint venture agreement is subject to obtaining customary approvals from the relevant authorities and satisfying certain conditions.
