Hyundai Motor Company has announced plans to build an automobile manufacturing facility in Saudi Arabia, signaling a significant expansion into the Middle East. The announcement, carried by Hyundai’s press service, confirms the company will form a joint venture with Saudi Arabia’s Public Investment Fund (PIF). Under the agreement, PIF will hold 70 percent of the joint venture, while Hyundai will own the remaining 30 percent. The project’s investment is expected to exceed 500 million dollars, underscoring the scale of the commitment from both sides.
The new plant is set to have an initial production capacity of 50,000 vehicles per year, making it the first South Korean automobile factory to operate in the Middle East. The facility will manufacture a mix of powertrain options, including internal combustion engine vehicles and electric cars, aligning with the region’s evolving automotive landscape and the global shift toward electrification. Construction is slated to commence in 2024, with production anticipated to begin in 2026. The venture positions Hyundai to tap into Saudi Arabia’s growing demand for modern mobility and to leverage the kingdom’s strategic location as a logistics hub. (Hyundai Motor Company press release, 2024)
Separately, Hyundai’s plant in St. Petersburg has been idle since 2022. In addition to Hyundai Creta and Solaris models, Kia produced the Rio and Rio X-Line there. The sale of the St. Petersburg operation was to be to a Russian company, with the agreement including a potential buyback option. This development was reported by Denis Manturov, the Deputy Prime Minister and head of Russia’s Ministry of Industry and Trade, in September. (Russian government briefing, 2023)
Earlier reporting noted that certain vehicle models face potential issues related to traffic enforcement. Analysts flagged that some car configurations could encounter challenges with regulatory compliance and traffic authority oversight in various markets, highlighting the importance of aligning product specifications with local rules and safety standards. (Industry analysis briefing, 2024)