Saudi Arabia and South Korean auto giant Hyundai Motor Group have agreed to nurture the automotive industry in the kingdom, the Saudi industry ministry said yesterday.
The two sides signed a memorandum of understanding (MoU) “to advance automotive production in the kingdom,” the ministry tweeted.
The MoU aims at enhancing co-operation in vehicle manufacturing in the region in a way that realises the national strategic goals for industry in developing local manufacturing capabilities and in line with the targets of the Saudi Vision 2030 that seeks to diversify the economic base in Saudi Arabia.
The MoU stipulates planning for building a Saudi Arabia-based assembly plant with the CKD system for electric cars and internal combustion engines cars, after Hyundai showed high interest and plans to explore joint investment opportunities with Saudi Arabia to achieve entrepreneurship in businesses and projects that guarantee environment safety and sustainability.
The Saudi National Industry Strategy seeks to localise the vehicle sector and increase investment opportunities in the sector, where light cars sales rates are expected to increase in the kingdom by 2.2 per cent during the upcoming decade.
It expects the localisation of the sector to yield big benefits to the kingdom, where it represents a regional opportunity considering the volume of the light vehicle market and expectations that show a double increase rate compared to the international rate over the next 10 years.
In November, Hyundai Motor Group’s chairman Euisun Chung, Samsung Electronics executive chairman Lee Jae-yong, and other South Korean business leaders met Saudi Crown Prince Mohammed bin Salman in Seoul and discussed business co-operation.
President Yoon Suk Yeol and the Saudi Crown Prince vowed to enhance bilateral co-operation in a wide range of major industry fields, including infrastructure and energy, during their November meeting.