Hyundai Motor Breaks Ground on First Production Plant in Saudi Arabia: "Key Hub for Middle East and Africa"

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Hyundai Motor Company will establish its first production plant in Saudi Arabia through a joint venture with the Public Investment Fund (PIF) of Saudi Arabia. The company plans to develop this facility as a regional production hub covering the rapidly growing markets of the Middle East and Africa. Through this initiative, Hyundai Motor has laid the groundwork not only for cooperation in mobility but also for future collaboration in hydrogen and energy businesses with Saudi Arabia, which aims to foster its automotive industry under its 'Vision 2030' strategy.

On May 14 (local time), Hyundai Motor held a groundbreaking ceremony for the Hyundai Motor Manufacturing Middle East (HMMME) plant at the King Salman Auto Park in King Abdullah Economic City, Saudi Arabia. The ceremony was attended by more than 200 key figures and officials from both countries, including Bandar Ibrahim Al-Khorayef, Minister of Industry and Mineral Resources of Saudi Arabia; Yazeed A. Al-Humied, Deputy Governor of PIF; Moon Byungjun, Charg? d'affaires of the Embassy of the Republic of Korea in Saudi Arabia; and Jang Jaehun, Vice Chairman of Hyundai Motor Group.

(From left) Park Wonkyun, Executive Director and Head of HMMME Corporation; Ahmed Ali Al-Subaey, Chairman of the Board of HMMME; Yazeed A. Al-Humied, Deputy Governor of the Saudi Arabian Sovereign Wealth Fund; Bandar Ibrahim Al-Khorayef, Minister of Industry and Mineral Resources; Jang Jaehun, Vice Chairman of Hyundai Motor Group; Moon Byungjun, Charg? d'affaires of the Embassy of the Republic of Korea in Saudi Arabia; Lee Hanwoo, Vice President and CEO of Hyundai Construction, are taking a commemorative photo at the groundbreaking ceremony of Hyundai Motor Saudi Production Corporation (HMMME). Provided by Hyundai Motor.

Deputy Governor Al-Humied congratulated the event, stating, "The partnership with Hyundai Motor is a testament to PIF's strong commitment to enhancing the technological capabilities of Saudi Arabia's automotive industry and nurturing outstanding talent." He added, "HMMME will become a significant milestone for the development of Saudi Arabia's automotive industry, and we will accelerate the growth of the Saudi mobility ecosystem through our ongoing partnership with Hyundai Motor."

Vice Chairman Jang said, "Today marks a historic day that opens a new chapter for both the Kingdom of Saudi Arabia and Hyundai Motor Group. Decades after Hyundai Construction took on the construction of Jubail Industrial Port in 1975, we are now preparing for another bold leap forward." He emphasized, "Together, we will manufacture automobiles and contribute to making the lives of Saudi citizens richer and more joyful." HMMME is a joint venture production company with Hyundai Motor holding a 30% stake and PIF holding a 70% stake. The plant, which will be built on a site of 400,000 square meters?equivalent to 56 soccer fields (7,140 square meters each)?is scheduled to begin operations in the fourth quarter of 2026. It will have an annual production capacity of 50,000 units, focusing on locally popular models and eco-friendly strategic models.

This plant will be designed to produce both electric vehicles and internal combustion engine vehicles on a mixed production line, adopting a completely knocked down (CKD) assembly method. Considering the lack of an existing automotive industry infrastructure in Saudi Arabia, vehicle parts will be sourced from overseas and assembled locally. The King Salman Auto Park, where the plant is located, is a newly established automotive manufacturing hub aimed at advancing Saudi Arabia's automotive industry. In the mid- to long-term, as a local parts supply chain is developed, HMMME's competitiveness is expected to further increase. Vehicles produced by HMMME will be supplied primarily to the Saudi market, but there are long-term plans to export to the Middle East and Africa. Hyundai Motor will be responsible for local sales and exports.

Hyundai Motor expects that securing a production base in Saudi Arabia will provide an opportunity to catch up with Toyota, which currently holds the largest market share in the Saudi market. Saudi Arabia is considered the largest automotive market in the Middle East. Last year, 2.49 million vehicles were sold in the Middle East, with 840,000 units?34% of the total?sold in Saudi Arabia. Hyundai Motor sold 136,000 vehicles in Saudi Arabia last year, achieving a 9% year-on-year growth rate. In the first quarter, sales reached 35,000 units, a sharp increase of 25% compared to the same period last year (28,000 units). The company aims to achieve sales of 140,000 units in Saudi Arabia this year and, based on this, to sell more than 230,000 units in the entire Middle East market.

However, as of the first quarter, the market share stands at 16.1%, which is just over 10 percentage points behind Toyota's 26.0%. Hyundai Motor expects that local production will not only enhance price competitiveness but also generate significant appeal among local consumers. In particular, Hyundai Motor sees the eco-friendly vehicle market in the Middle East as gradually emerging and plans to strategically focus on eco-friendly vehicles. In the first quarter, the company sold more than 10,000 eco-friendly vehicles in the Middle East market, a 55% increase compared to the same period last year (6,500 units). If this trend continues through the end of the year, Hyundai Motor expects to surpass annual sales of 30,000 eco-friendly vehicles for the first time.

Vice Chairman Jang explained, "Providing customer-friendly products and services is our top priority," and added, "We will strategically respond to how quickly we can accelerate the development of market-friendly products and the localization of production."