The long-anticipated project to manufacture Hyundai cars in Saudi Arabia has officially begun, marking a significant milestone in the Kingdom’s automotive industry. Located within the King Abdullah Economic City, the new Hyundai Motor Manufacturing Middle East (HMMME) plant is a joint venture between Saudi Arabia’s Public Investment Fund (PIF) and South Korea’s Hyundai Motor Company. Situated in the King Salman Automotive Cluster, this facility is set to be the first of its kind in the Middle East.
A Mix of Fuel-Powered and Electric Models
Hyundai’s ambitious plans for the facility include an annual production capacity of 50,000 vehicles. This will encompass a variety of models, including both traditional fuel-powered cars and electric vehicles (EVs), catering to the growing demand for environmentally friendly transportation. The first vehicle from the plant is expected to roll off the production line by the fourth quarter of 2026.
The facility will play a key role in meeting the rising demand for Hyundai vehicles in the region. Saudi Arabia’s automotive market has seen steady growth, particularly in the mid-to-upper mid-range segments, where Hyundai has built a strong presence. This new manufacturing plant is expected to bolster the brand’s market share even further.
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Ownership and Investment
PIF holds a dominant 70% stake in the HMMME venture, with Hyundai Motor Company owning the remaining 30%. This joint venture is part of Saudi Arabia’s broader strategy to diversify its economy and reduce its dependence on oil revenues. By fostering partnerships with global brands like Hyundai, the Kingdom aims to develop key industries, including automotive manufacturing, which is seen as a crucial step in creating a sustainable and diverse economic future.
Yazeed A. Alhumied, Deputy Governor and Head of MENA Investments at PIF, emphasized the importance of the project in strengthening Saudi Arabia’s automotive sector. “This is a significant milestone for PIF as it further strengthens the automotive industry in Saudi Arabia,” Alhumied said. “PIF will continue to enable and accelerate the growth of Saudi Arabia’s automotive ecosystem through partnerships and investments.”
Boost for Local Workforce
The new plant is expected to create thousands of job opportunities, contributing to the Kingdom’s efforts to reduce unemployment and increase local workforce participation. The project will also provide opportunities for skills transfer and knowledge development, particularly in the fields of automotive manufacturing, engineering, and technology.
As part of the partnership between PIF and Hyundai, a focus will be placed on training and empowering the local workforce, ensuring that Saudi nationals are equipped with the expertise necessary to support the growth of the country’s automotive industry. This emphasis on skills development aligns with the broader goals of Saudi Vision 2030, which seeks to diversify the Kingdom’s economy and build a knowledge-based workforce.
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A Leap Forward for Saudi Manufacturing and Automotive Sector
The establishment of Hyundai’s manufacturing plant in Saudi Arabia is seen as a major leap forward for the Kingdom’s manufacturing sector. Local production of vehicles from one of the world’s largest automotive brands will not only enhance Saudi Arabia’s manufacturing capabilities but also attract further investment into the Kingdom’s industrial base.
This new facility joins Saudi Arabia’s growing list of advanced manufacturing projects, with other international companies, such as Lucid Motors, already establishing a foothold in the country. Saudi Arabia is home to an assembly plant for Lucid’s premium electric vehicles (EVs), further cementing its position as a hub for automotive innovation in the region.
Future of Saudi Arabia’s Automotive Industry
The Hyundai plant is expected to play a key role in Saudi Arabia’s vision to become a leading player in the global automotive industry. With the Kingdom already positioning itself as a key market for electric vehicles, this new facility is poised to contribute to the transition to greener transportation options in the region.
In the coming years, the plant is expected to have a substantial impact on the local economy, fostering job creation, skill development, and technological innovation, while also helping to solidify Saudi Arabia’s standing as a key player in the global automotive industry. The collaboration between PIF and Hyundai is just one example of how strategic partnerships are driving the Kingdom’s economic transformation in line with Saudi Vision 2030.
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