Hyundai Motor breaks ground on its first auto plant in Saudi Arabia
Hyundai Motor Company said Thursday it began constructing its first car manufacturing plant in Saudi Arabia, marking its entry into the burgeoning Middle Eastern market.
In partnership with Saudi Arabia's Public Investment Fund, the auto giant will set up Hyundai Motor Manufacturing Middle East to produce up to 50,000 electric and internal combustion vehicles annually, with operations slated to begin in the fourth quarter of 2026. The PIF and Hyundai hold 70 percent and 30 percent stakes, respectively.
The groundbreaking ceremony was held at the plant's construction site at the King Salman Automotive Cluster in Saudi Arabia. The event was attended by over 200 key figures, including Chang Jae-hoon, Hyundai Motor Group vice chairman; Moon Byung-jun, acting ambassador of South Korea to Saudi Arabia; Yazeed A. Al-Humied, deputy gov. of Saudi Arabia's Public Investment Fund; and Bandar Ibrahim Al-Khorayef, minister of industry and mineral resources of Saudi Arabia.
Hyundai Motor's foray into Saudi Arabia is a strategic investment to intensify its push into the rapidly growing Middle Eastern market. The country represents around 34 percent of the Middle Eastern automotive market. Out of approximately 2.49 million vehicles sold in the Middle East last year, 840,000 were sold in Saudi Arabia, according to sources.
For the automaker, Saudi Arabia accounts for over half of its sales across the 14 Middle Eastern countries where it operates. In the first quarter of this year, Saudi Arabia took up over 34,000 of the 60,000 retail sales in the Middle East.
Saudi Arabia also shows significant potential in the EV market, where Hyundai Motor has a strong presence. Under the Saudi government's Vision 2030 initiative to diversify its energy-centric industrial structure towards manufacturing and hydrogen energy, it aims to reduce oil dependency by 2030, producing 500,000 electrified cars annually and converting over 30 percent of vehicles in Riyadh to EVs.
In addition, the rapidly advancing relations between the US — Hyundai's largest global market — and Middle Eastern countries enhance the carmaker's prospects in the region. Following his reelection, President Donald Trump visited Saudi Arabia, Qatar and the UAE from Tuesday to strengthen economic ties.
'This groundbreaking ceremony opens the beginning of a new era for both Hyundai and Saudi Arabia,' stated Chang. 'HMMME will support Saudi Arabia's Vision 2030 by fostering local talent with expertise in mobility technology.'
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