Saudi PIF to develop new automotive cluster in KAEC
RIYADH, February 10, 2025
Saudi Arabia's sovereign wealth fund PIF has announced plans to develop an exclusive cluster for automotive manufacturing activities within the King Abdullah Economic City (KAEC).
The new King Salman Automotive Cluster will be a major centre for the automotive sector and will have headquarters and factories for local and international companies, said a statement from PIF.
Notable companies include Ceer, the first Saudi electric car brand, and Lucid Motors, which opened its first international factory in KAEC in 2023.
It will also host several PIF joint projects with global manufacturers, including Hyundai Motor – establishing a highly automated factory for manufacturing cars in Saudi Arabia – and a joint venture agreement with Pirelli to establish a tire factory locally, it stated.
His Royal Highness Prince Mohammed bin Salman bin Abdulaziz Al Saud, Crown Prince and Prime Minister, today (February 10) designated it as King Salman Automotive Cluster, in a move that is seen as a crucial step in Saudi Arabia’s economic diversification.
It will help create optimal investment opportunities for the private sector to develop promising sectors in Saudi Arabia.
The hub will be an enabler for the automotive sector and sustainable transportation; contributing to raising non-oil GDP and increasing exports.
According to PIF, the cluster will enhance the automotive sector in Saudi Arabia by accelerating the growth of local capacity in manufacturing and sector-related research and development, and by making supply chains to serve regional and international markets more efficient.
The cluster aims to create optimal investment opportunities for the private sector to develop promising sectors in Saudi Arabia. It is expected that the cumulative GDP contribution from companies operating in King Salman Automotive Cluster will hit SAR92 billion ($24.5 million) by 2035.
The cluster will also contribute to the creation of many direct and indirect jobs, support the local manufacturing sector, and increase Saudi exports to regional and global markets, which will positively impact the national balance of payments, said the statement.
King Salman Automotive Cluster will leverage the supportive environment and investment incentives provided by KAEC, including its logistical infrastructure, and its proximity to a highly developed port in a vital location for global trade.
These factors will provide opportunities for the local private sector and international companies to engage as partners, suppliers, and investors in the automotive sector and its related services, it added.-TradeArabia News Service
