Industries-Automotive

The Automotive industry in Saudi Arabia is undergoing a transformation with the introduction of electric vehicles (EVs) and the establishment of local manufacturing plants. Lucid Motors, a California-based EV manufacturer, is one of the biggest U.S. investments by Saudi Arabia’s Public Investment Fund (PIF), targeting peak production of up to 155,000 cars a year. Ceer Motors, a joint venture between PIF and Hon Hai Precision Industry Co. (Foxconn), is the first National Saudi Automotive Brand and aims to design, manufacture, and sell an innovative portfolio of EVs that will lead in the areas of e-mobility, connectivity, and autonomous driving technologies. Hyundai Motor Company has signed a memorandum of understanding (MOU) with the Saudi Ministry of Industry and Mineral Resources to explore cooperation in vehicle manufacturing in the region. The MOU outlines plans to establish a Saudi-based assembly plant using the CKD (completely knocked down) system for electric cars and internal combustion engine cars.

The automotive industry in Saudi Arabia is expected to grow at a rate of 12% by 2030, driven by the country’s Vision 2030 program and its ambitious goals for clean mobility and autonomous mobility. The industry is also expected to benefit from the Kingdom’s strategic location and investment in advanced technologies. However, the industry faces challenges such as a lack of a local matured supply chain and a skilled workforce who is also a top priority of the National Industrial Stratege and multiple sector initiatives that aims to address these challenges and develop the automotive sector in order to create jobs for locals and contribute to the country’s growing GDP.

Automotive Stakeholders Taskforce team working together and aligned in sector development The NIDC Auto team is leading the Automotive sector efforts to develop a sustainable ecosystem in the Kingdom. The automotive industry is a key pillar of the global economy; a main driver of macroeconomic growth and technological advancement in developing and developed countries. The value chain of the automotive industry spans very wide and covers many other adjacent industries; and hence creates a multiplier effect much higher than any other industry. This multiplier factor ranges between 5-7 between direct OEM jobs and the eco-system jobs.

Saudi Arabia’s Automotive market is leading the Region with a 37% share in MENA and sales forecast 779K vehicles by 2032. The Market share in KSA is dominated by Japanese, Korean, and Chinese brands with more than 50% of the sales.

Currently, there are around ~11 million cars (PARC) on the roads in the Kingdom and hence, there is a strong increase in demand for automotive aftermarket parts such as tires (Market size of ~20 million) and other aftermarket automotive components.

Clean Mobility Saudi Arabia announced plans to target an EV fleet penetration rate of 30% in its capital city of Riyadh by 2030. This forms part of the government’s recent pledge to reach net-zero emissions by 2060. The goal to boost EVs in Riyadh comes as more countries attempt to reduce or phase-out internal combustion engines run on gasoline and petrol. Saudi nationals have shown a strong appetite for owning EVs.