In a big move for Saudi Arabia’s automotive sector, Crown Prince Mohammed bin Salman has announced the official naming of the “King Salman Automotive Industry Cluster.” This facility will be situated within the special economic zone of King Abdullah Economic City, dedicated to activities surrounding automobile manufacturing.
The establishment of the King Salman Automotive Industry Cluster represents a crucial step towards achieving economic diversification in the Kingdom. It aims to facilitate the growth of the automotive industry and sustainable transport solutions, contributing to the enhancement of the non-oil GDP and increasing exports. The complex will also focus on advancing local capabilities in manufacturing, research, and development, while improving supply chain efficiencies with regional and global markets.
As a key hub for both local and international firms in the automotive sector, the complex will host notable businesses including “Ceer,” which is noted as the first Saudi electric vehicle brand. Additionally, “Lucid Motors” has inaugurated its first international factory in King Abdullah Economic City in 2023. Partnerships have also been formed with global manufacturers. For example, a project with Hyundai Motor aims to establish a highly automated car manufacturing plant within Saudi Arabia, alongside a joint venture with Pirelli to set up a tyre manufacturing facility in the Kingdom.
The complex aims to create ideal investment opportunities for the private sector and participate in the development of promising sectors in Saudi Arabia. It is projected to contribute over 92 billion Riyals to the non-oil GDP by 2035 and positively impact the balance of payments, while generating both direct and indirect job opportunities. Furthermore, it is expected to bolster local industry and enhance the Kingdom’s exports regionally and globally, thus impacting the balance of payments positively.
The King Salman Automotive Industry Cluster will leverage the supportive legislative environment for investment provided by Saudi Vision 2030, alongside the investment incentives of King Abdullah Economic City’s special economic zone and its robust logistical infrastructure. Its strategic location near a modern port is set to offer opportunities for local private sector involvement and collaboration with global firms as partners, suppliers, and investors in the automotive sector and ancillary services.
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This initiative is aligned with the objectives of Saudi Vision 2030 to diversify the economy and ensure sustainable growth. It is anticipated that the complex will play a pivotal role in realising the goals of the National Industrial Development and Logistics Programme, which seeks to position Saudi Arabia as a leading industrial powerhouse and a global logistics hub through the development of high-growth sectors and attraction of foreign investment.
The automotive and transport sector has been identified as a strategic priority for the Public Investment Fund, which holds several investments in the automotive field in collaboration with the private sector. The fund is committed to enhancing infrastructure and developing local supply chain capabilities, targeting local expertise and technology advancements through joint projects with major global manufacturers in car production and related industries.
