Crown Prince Mohammed bin Salman named the automotive manufacturing hub within King Abdullah Economic City the “King Salman Automotive Cluster” with the intent that it become an automotive industry center.
The cluster is designed to create an attractive investment environment for the private sector and targets generating a $24.5 billion boost to GDP by 2035. In so doing it would create thousands of direct and indirect jobs, support local manufacturing, and boost Saudi exports, positively impacting the nation’s balance of payments.
Offering headquarters and production facilities for local and international companies, King Abdullah Economic City (KAEC) is already home to Lucid Motors which set up its assembly and future manufacturing plant in 2023. Saudi Arabia’s Public Investment Fund (PIF) owns about 60% of Lucid Motors through its affiliate Ayar Third Investment Co.
The “King Salman Automotive Cluster” will also include CEER, a joint venture between PIF and Hon Hai Precision Industry (Foxconn) to produce electric vehicles in Saudi Arabia. BMW provides component technology for Ceer’s vehicles, including sedans and sports utility vehicles.
Likewise, in October 2023, PIF signed a joint venture with Hyundai to establish a highly automated vehicle manufacturing plant in Saudi Arabia. PIF holds a 70% stake in the joint venture and Hyundai will 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.
That same month, PIF entered a joint venture (75% PIF) with Pirelli Tyre to build a tire manufacturing facility in Saudi Arabia. It is expected to start production in 2026 and will manufacture tires under the Pirelli brand as well as manufacture and market tires under a new local brand targeting the domestic and regional market. The total investment in the JV is around $550 million.
Automotive and mobility sectors is one of PIF’s strategic investment priorities.
The naming of the King Salman Automotive Cluster is intended to advance National Industrial Development and Logistics Program goals, promote the kingdom as a global industrial hub and logistics center, attract investment, create jobs and grow exports.
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