Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), signed an agreement with South Korea’s Hyundai Motor Group to build a car plant in Saudi Arabia, according to a joint statement.
Saudi Arabia has a plan to manufacture more than 300,000 cars annually by 2030.
According to the agreement, the plant will have an annual production capacity of 50,000 electric and gas-powered cars and will be the first South Korean automobile factory in the Middle East.
The PIF will have a 70% stake in the new joint venture; Hyundai Holding will hold the remaining 30%.
Total investment for the project is estimated to exceed $500 million, it added.
The Gulf state is currently shifting to a diversified economy away from oil under the Saudi Vision 2030.
Hyundai Motor Group, the world’s No. 3 auto group by sales, is embarking on manufacturing in the Gulf state.
“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 statement said.
South Korea’s President Yoon Suk Yeol visited Saudi Arabia, Yoon traveled with a delegation of business leaders including Hyundai Motor Group Executive Chair E.S. Chung.
Yoon met with Saudi Crown Prince Mohammed bin Salman, the kingdom’s de facto ruler.
The first cars would roll off the assembly line in 2026. Saudi Arabia accounts for almost 52 percent of the vehicles sold in the Gulf Cooperation Council (GCC) and 35 percent in the MENA region in 2020, according to statistics.
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