As Saudi Arabia designates the automotive industry as a new growth strategic business and expands investment, domestic complete vehicle corporations are accelerating their entry into the local market. Following complete vehicle corporations such as Hyundai Motor Group, accompanying investments by parts industries—batteries, electric components, and materials—are expected to become visible.
According to the industry on the 24th, the Saudi government will hold an automotive industry investment briefing on the 26th for the auto parts sector and others. Hyundai Motor, global electric vehicle company Lucid Motors that has entered the local market, and Saudi's first electric vehicle manufacturer, Ceer Motors, are scheduled to attend.
With domestic complete vehicle corporations such as Hyundai Motor and KG Mobility (KGM) presenting concrete local entry plans, the Saudi government's position is to support opportunities for parts makers to enter together. The policy is to support the local settlement of parts makers to create a more competitive ecosystem.
Hyundai Motor is building Saudi's first production plant (Hyundai Motor Saudi Manufacturing Entity · HMMME) in a joint venture with the Saudi Public Investment Fund (PIF). On 5th, ground was broken at the King Salman Industrial City, a Saudi automotive manufacturing hub, and operations are targeted for the fourth quarter of next year. After completion, it plans to produce about 50,000 internal combustion and electric vehicles annually.
KGM is partnering with Saudi National Automobiles (SNAM), a Saudi state-owned automaker, to build a KD (knockdown for local assembly) plant. The completion date is next year, and the annual production volume will be increased sequentially from 8,000 to 15,000 units.
Not only domestic complete vehicles but also the local entry of global electric vehicle corporations is increasing. U.S. electric vehicle corporation Lucid Motors is operating a plant in the King Salman Automotive Industrial City with support from the Saudi Ministry of Investment (MISA) and PIF, and began production in 2023. The goal is to raise annual production capacity to 155,000 units in the future.
Ceer Motors, Saudi's first electric vehicle manufacturer created by PIF in partnership with Taiwan's Foxconn, is also preparing for mass production. Ceer plans to receive vehicle development technology transfer from Germany's BMW and to design, manufacture, and sell locally. The goal is to produce 500,000 electric vehicles annually by 2030.
Ceer also signed a 3 trillion won parts contract with Hyundai Transys, an affiliate of Hyundai Motor Group. This is the first time Hyundai Transys has signed a supply contract with a non-affiliate outside the group. Starting in 2027, it will provide core electric vehicle parts to Ceer.
Saudi Arabia is the Middle East's largest car market, with 840,000 new cars sold last year. Its share of total Middle East sales (2.49 million units) reached 34%. In the mid to long term, Saudi Arabia aims to leap forward as an automotive hub that encompasses not only the Middle East but also the Gulf Cooperation Council (GCC) and North Africa.
The Saudi government also presented a goal of increasing the electric vehicle share, currently around 1%, to 30% of new car sales by 2030. According to the Korea Institute for International Economic Policy (KIEP), the Saudi electric vehicle market, which was worth 3.2 billion Saudi riyals (about 1.1 trillion won) last year, is expected to reach 18 billion Saudi riyals (about 6.7 trillion won) by 2030, recording an average annual growth rate of about 22.7%.