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Hyundai Motor revealed its new joint venture deal with the Public Investment Fund (PIF), Saudi's sovereign wealth fund, which is also said to be one of the largest state-owned investment funds in the world. Under the agreement, the two will build a new vehicle production plant in Saudi Arabia.
Hyundai Motor and PIF will establish the new automotive facility, and this was confirmed by South Korea's President Yoon Suk Yeol, who visited the Middle Eastern country for a summit. According to Reuters, the latter will own a 70% stake in the JV, and Hyundai Motor will hold the remaining 30%.
Production Plans and Start of Construction Date
The joint venture was revealed during the Saudi-Korean Business Forum, and at that time, it was also shared that the goal for the JV is to produce 50,000 units of vehicles per year. Some vehicles to be made in the facility include the internal combustion engine (ICE) and electric vehicle (EV) units.
Hyundai Motor and PIF will hold the groundbreaking ceremony sometime in 2024 and start production by 2026.
Based on estimation, the project's total investment will likely exceed the $500 million mark. The new plant is also expected to generate thousands of new jobs for the locals while attracting additional industry investments.
Hyundai's First Factory in the Middle East
Yonhap News Agency reported that the upcoming plant will be Hyundai Motor's first in the Middle East region. This business cooperation was approved as part of the Saudi Vision 2030 government strategy.
It was also noted that Saudi Arabia is vigorously promoting the development of its own automotive business to diversify its growth drivers. This comes as the country is exerting more efforts in finding other businesses to help it reduce its heavy dependence on its oil trade.
"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," PIF's deputy governor and head of MENA investments, Yazeed A. Al-Humied, said in a press release. "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."
Photo by: Hyundai Motor Press Release
