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Work to begin in 2024 on Hyundai’s $500m Saudi car plant

Hyundai and PIF officials at the signing ceremony for their venture Hyundai
Hyundai and PIF officials at the signing ceremony for their venture

A joint venture between Saudi Arabia’s Public Investment Fund and Hyundai Motor Company is expected to break ground on its first vehicle manufacturing plant next year.

The sovereign fund will hold a 70 percent stake in the venture, with the South Korean car giant holding the rest. Vehicle production is due to start in 2026.

The total investment is estimated to be more than $500 million. 

Hyundai will be strategic technology partner for the development of the manufacturing plant, PIF said in a statement.

The joint venture, announced at the Saudi-Korean Business Forum, aims to manufacture 50,000 vehicles a year, including internal combustion engines and electric.  

Yazeed A Al-Humied, deputy governor and head of Mena investments at PIF, said the Hyundai investment aligned closely with the fund’s existing stakes in Lucid and Ceer Motors, expanding the kingdom’s automotive and mobility value chain.

“Our joint efforts will create opportunities for innovation and environmental progress,” said Jaehoon Chang, president and CEO of Hyundai.

The joint venture is subject to obtaining regulatory approvals.

The partnership is PIF’s latest initiative to promote Saudi Arabia as a global automotive player and boost manufacturing capabilities, infrastructure and supply chains. 

The sovereign fund recently launched Tasaru, the National Automotive and Mobility Investment Company, which will localise 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 the kingdom by 2030.