In a move that reflects Saudi Arabia’s ambition to become a leading industrial hub in the region, South Korean automotive giant Hyundai has announced the commencement of construction on its first factory in the Middle East. The announcement was made during a groundbreaking ceremony held at King Abdullah Economic City, within the King Salman Auto Park, one of the key industrial initiatives tied to the Saudi Vision 2030.
This landmark project is a joint venture between Hyundai, holding a 30 percent stake, and Saudi Arabia’s Public Investment Fund (PIF), which owns the remaining 70 percent. The partnership illustrates the Kingdom’s strategic push to attract major global players and foster collaborative efforts to establish forward looking industries. This investment marks a significant milestone in Saudi Arabia’s efforts to diversify its economy and reduce reliance on oil as the primary source of national revenue.
Annual Production Capacity to Boost Local and Regional Markets
The factory is scheduled to roll out its first vehicles by the fourth quarter of 2026, marking an ambitious timeline that reflects the partners’ commitment to executing the project with exceptional speed and efficiency compared to other major industrial ventures. The facility is expected to achieve an annual production capacity of around 50,000 units, positioning it as a key player in meeting the growing demand of the Saudi market while also enhancing export opportunities across the Gulf and broader regional markets.
Hyundai’s manufacturing plan stands out for including both electric vehicles and traditional gasoline powered models, reflecting a deep understanding of the global shifts in the transportation sector. As electric vehicle adoption accelerates worldwide, this move lays a strong foundation for the rise of sustainable mobility within the Kingdom, aligning with Saudi Arabia’s broader goals to reduce carbon emissions and expand the use of renewable energy across its economy.
Technology Transfer and Training of Saudi Talent
The groundbreaking ceremony was attended by over 200 high level officials from both Saudi Arabia and South Korea, including Hyundai Motor Company’s Executive Vice Chairman Jaehoon Chang and Saudi Arabia’s Minister of Industry and Mineral Resources, Bandar Alkhorayef. This prominent attendance highlights the strategic significance of the project, not only from an economic perspective but also as a symbol of long term cooperation between the two allied nations.
During his address, Jaehoon Chang emphasized that the new facility goes beyond being a mere production plant. It is envisioned as a hub for knowledge transfer and the development of national capabilities, aligning closely with Saudi Arabia’s Vision 2030, which places a strong focus on empowering local talent. He added that the factory will play a key role in training Saudi engineers and technicians in the latest manufacturing and mobility technologies, preparing them to lead the future of the country’s industrial sector.
The factory’s location within the King Salman Automotive Zone adds substantial value to the project. It enables seamless integration with a broader network of suppliers and support services, while benefiting from a modern infrastructure that supports every stage of the manufacturing process, from raw materials to final vehicle assembly.
Saudi Arabia Redefines Its Role in Global Manufacturing
This announcement marks a pivotal shift in Saudi Arabia’s journey toward advanced industries, transitioning from its traditional role as a consumer of automobiles to a leader in their production and export. The success of Hyundai’s new factory in the Kingdom is expected to serve as a strong catalyst for attracting more global investments to the local market, supporting economic diversification, and creating thousands of jobs for Saudi nationals.
As regional and international markets await the launch of production in 2026, Saudi Arabia is preparing to unveil the first locally manufactured Hyundai vehicle, a symbol of accelerating industrial ambition and a national vision determined to secure a firm foothold in the world of modern manufacturing and innovation.
My passion for cars began long before my journey into automotive journalism in 2015. Even though I'm originally a pharmacist, the thrill of speed, elegant designs, and roaring engines has always had my heart. Today, I channel this passion by exploring the newest cars and sharing my experiences with fellow car enthusiasts across the GCC.
