The Saudi Public Investment Fund (PIF) and South Korean company Hyundai have signed an agreement to establish an automobile manufacturing plant in the Kingdom of Saudi Arabia with an investment exceeding $400 million.

The agreement was inked during the "Saudi-Korean Business Forum" in conjunction with the visit of South Korean President Yun Seok-Yul to the Kingdom, celebrating 50 years of economic relations between the two countries.

The expected investment value in this project is approximately SAR 1.8 billion (equivalent to $479.8 million). The PIF holds a 70% stake in this joint project, with Hyundai owning the remaining 30%, making them a strategic partner to facilitate the development of the new plant by providing technical and commercial support.

The annual production capacity of the plant is anticipated to be 50,000 vehicles, including both internal combustion engine and electric cars. This will be the first South Korean automobile manufacturing plant in the Middle East. Additionally, the project includes the laying of the foundation stone for the factory, which is set to provide thousands of new job opportunities by 2024, with production commencing in 2026.

Yazeed bin Abdulrahman Al-Humaid, Deputy Governor and Head of the Middle East and North Africa Investments at the Public Investment Fund, stated, "This partnership with Hyundai is a pivotal step in the fund's efforts to enable and accelerate local automotive industry growth, in line with our investment strategy. It aligns with our investments in Lucid and Rivian, strengthening the local value chain in the automotive and mobility sector."

The Saudi National Strategy for the automotive industry aims to localize the sector and increase investment opportunities. According to the Saudi Press Agency (SPA), sales of light vehicles in the Kingdom are expected to grow by 2.2% over the next decade.

Furthermore, the Public Investment Fund, in collaboration with the Saudi Electricity Company, recently established an electric vehicle infrastructure company to develop the necessary infrastructure to support fast charging services for electric vehicles across the Kingdom. This company is expected to offer its services at more than 1,000 locations and provide over 5,000 fast chargers by 2030, covering various cities and connecting roads.