South Korean automotive giant Hyundai has officially begun construction of a new car manufacturing plant in Saudi Arabia, marking a historic milestone as the first major foreign carmaker to establish production operations in the Kingdom.
The new facility, located within the King Salman Automotive Cluster in King Abdullah Economic City near Jeddah, is part of Saudi Arabia’s broader efforts to diversify its economy and build a robust domestic automotive industry.
Once operational, the factory is expected to produce up to 50,000 vehicles annually, including both internal combustion engine (ICE) models and electric vehicles (EVs), tailored to meet local market demands.
Speaking at the groundbreaking ceremony, Hyundai Motor Company President and CEO Jaehoon Chang said, “We believe our role will be significant in this early stage of the industry’s development here. This plant not only signals Hyundai’s long-term commitment to the region but also opens a new chapter in Saudi-Korean economic collaboration.”
The factory will operate under a joint ownership structure, with Saudi Arabia’s Public Investment Fund (PIF) holding a 70 percent stake and Hyundai retaining the remaining 30 percent. The plant’s assembly lines will rely on knock-down kits, with parts shipped from South Korea, according to The Korea Times.
Construction of the plant is expected to be completed by late 2026, with the first vehicle scheduled to roll off the production line in October of that year.
The project is projected to contribute approximately $5 billion (about £3.8 billion) to the Saudi economy over the next two decades, according to estimates shared during the launch event.
The announcement is being viewed as a strategic win for Saudi Arabia’s Vision 2030 initiative, which aims to reduce the Kingdom’s dependence on oil by nurturing local industries and expanding its industrial base.
The King Salman Automotive Cluster has been designed as a new hub for the car manufacturing sector, offering integrated infrastructure and logistical advantages to attract global automotive players.
Hyundai’s presence in Saudi Arabia is already well-established, with around 136,000 vehicles sold in the country last year alone. However, this factory represents a deeper investment into local manufacturing capabilities and employment opportunities.
While details on job creation have not yet been fully disclosed, the plant is expected to generate thousands of direct and indirect employment opportunities for Saudis over the coming years.
Industry analysts view the development as a turning point for both Hyundai and Saudi Arabia. For Hyundai, the plant provides an opportunity to consolidate its market position in the Middle East while gaining proximity to key export markets in Africa and Asia.
For Saudi Arabia, the move serves as a strong endorsement of its industrial ambitions and could potentially attract further foreign direct investment in the automotive sector.
With groundwork underway and investment secured, Hyundai’s Saudi venture stands as a symbol of growing economic cooperation between Asia’s industrial powerhouses and the Gulf’s rising manufacturing ambitions.