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Business PIF and Hyundai Motor Company Sign Joint Venture Agreement to Establish New Automotive Manufacturing Plant in Saudi Arabia
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Business PIF and Hyundai Motor Company Sign Joint Venture Agreement to Establish New Automotive Manufacturing Plant in Saudi Arabia
Business PIF and Hyundai Motor Company Sign Joint Venture Agreement to Establish New Automotive Manufacturing Plant in Saudi Arabia
PIF and Hyundai Motor Company Sign Joint Venture Agreement to Establish New Automotive Manufacturing Plant in Saudi Arabia
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RIYADH/ SEOUL –October 22, 2023: 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.
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 thousands of 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 A. 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.”
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.
President and CEO of Hyundai Motor Company
The completion of the joint venture agreement is subject to obtaining customary approvals from the relevant authorities and satisfaction of conditions.
About PIF
The Public Investment Fund (PIF) is one of the largest and most impactful sovereign wealth funds in the world. Since 2015, when the Board was reconstituted and oversight transferred to the Council of Economic and Development Affairs, the Fund’s board of directors has been chaired by His Royal Highness Crown Prince Mohammad bin Salman bin Abdulaziz, Prime Minister, Chairman of the Council of Economic and Development Affairs, and Chairman of the Public Investment Fund. PIF a leading role in advancing Saudi Arabia’s economic transformation and diversification, as well as contributing to shaping the future of the global economy. Since 2017, PIF has established 90 companies. PIF is building a diversified portfolio by entering into attractive and long-term investment opportunities in 13 strategic sectors in Saudi Arabia and globally. PIF's strategy, as set out in the PIF Program 2021-2025 - one of the Vision 2030 realization programs - aims to enable many promising sectors and contribute to increasing local content by creating partnerships with the private sector, in addition to injecting at least 150 billion riyals annually into the local economy. PIF works to transfer technologies and localize knowledge to build a prosperous and sustainable economy domestically. As the investment arm Saudi Arabia, PIF looks to make unique investments, and is building strategic alliances and partnerships with prestigious international institutions and organizations, which contribute to achieving real long-term value for Saudi Arabia, in line with the objectives of Vision 2030. PIF has also created an operational governance model that reflects its main tasks and objectives, in line with best international practices. Applying this model of governance enhances the level of transparency and effectiveness in decision-making and future progress.
More information about PIF can be found at:
About Hyundai Motor Company
Established in 1967, Hyundai Motor Company is present in over 200 countries with more than 120,000 employees dedicated to tackling real-world mobility challenges around the globe. Based on the brand vision ‘Progress for Humanity,’ Hyundai Motor is accelerating its transformation into a Smart Mobility Solution Provider. The company invests in advanced technologies such as robotics and Advanced Air Mobility (AAM) to bring about revolutionary mobility solutions, while pursuing open innovation to introduce future mobility services. In pursuit of sustainable future for the world, Hyundai will continue its efforts to introduce zero emission vehicles equipped with industry-leading hydrogen fuel cell and EV technologies.
More information about Hyundai Motor and its products can be found at:
https://www.hyundai.com/worldwide/en/ or Newsroom: Media Hub by Hyundai
