Accelerating Automotive Localization in Saudi Arabia: Vision 2030 Towards a Sustainable Industrial Economy

The automotive sector in Saudi Arabia is undergoing a rapid strategic transformation towards localization, aligned with the government’s ambitious Vision 2030 goals. This was highlighted during a virtual seminar organized by the Saudi-American Business Council in cooperation with the National Industrial Development Center, where significant progress in local production of cars and spare parts was showcased, emphasizing the pivotal role of the national industrial strategy in shaping the future of this vital sector.

Accelerating Localization in the Automotive Sector

Aftab Ahmed, Senior Advisor at the National Industrial Development Center, affirmed that Saudi Arabia is witnessing a swift shift towards local manufacturing of vehicles and components, in line with the national industrial strategy goals under Vision 2030. These efforts aim to build an integrated industrial ecosystem positioning Saudi Arabia as a regional leader and enhancing its ability to attract local and international investments.

Strategic Dialogue Among Industry Leaders

The seminar hosted over 100 leaders and experts from the Saudi and US automotive sectors, discussing the latest government initiatives, investment standards, and operational experiences within the Kingdom. The event provided a platform to exchange insights on opportunities and challenges in the Saudi automotive market, especially amid global shifts toward electric vehicles and smart technologies.

Notable participants included James De Luca, CEO of Saudi “SIR” company, and Faisal Sultan, Vice President of Lucid Motors for the Middle East, who shared their companies’ experiences in investing and manufacturing in Saudi Arabia, affirming the attractiveness of the Saudi market as a future automotive manufacturing hub.

Role of the Saudi-American Business Council

Susan Lindeman, Interim CEO of the Saudi-American Business Council, emphasized the council’s ongoing support for cooperation and growth opportunities in vital sectors like automotive manufacturing for over 30 years. She explained that the council aims to bridge perspectives between industry leaders and decision-makers, provide investment opportunities, and enhance professional networking, considering such dialogues essential to drive innovation and sector advancement.

Saudi Vision: A Regional Automotive Hub

Last November, Khalil bin Salama, CEO of the National Industrial Development Center, stated that Saudi Arabia aims to become a regional automotive manufacturing hub, based on Vision 2030 and the national industrial strategy launched in 2022. He confirmed that the Kingdom is not only focused on developing a local car brand but also on building an integrated industry that attracts domestic and foreign investments and creates quality jobs for citizens.

National Industrial Strategy: Pillars and Aspirations

The national industrial strategy focuses on transforming the industrial economy into a resilient and integrated regional power, striving for global leadership in select products. To achieve this, the strategy emphasizes:

• Enhancing local and regional supply chains.
  
  

• Developing legislative and financial environments to attract investors.
  
  

• Increasing the contribution of small and medium enterprises.
  
  

• Raising local content ratios in manufacturing.
  
  

• Expanding international trade scope.
  
  

• Supporting innovation and attracting industrial talent.
  
  

These efforts aim to increase the industrial sector’s contribution to GDP to $377 billion by 2035, create 3.3 million jobs, and significantly boost exports and localization rates.

Future Challenges and Opportunities

Despite ambitious goals, the sector faces challenges related to developing industrial infrastructure, knowledge transfer, and training national workforce. However, continuous government support and growing interest from global companies in investing in Saudi Arabia enhance the prospects for success and transformation into a leading regional automotive hub.

The accelerating pace of automotive localization in Saudi Arabia represents a strategic step towards achieving Vision 2030 objectives, supported by strong government backing and effective international cooperation. By developing supply chains, fostering innovation, and attracting investments, Saudi Arabia is positioning itself as a regional industrial leader with promising growth prospects and future job opportunities for coming generations.