RIYADH - South Korea's Hyundai Motor Group will build a car plant in Saudi Arabia jointly with the Public Investment Fund (PIF), Saudi Arabia's sovereign wealth fund, South Korea's President Yoon Suk Yeol said on Sunday.
Yoon was speaking in Riyadh where the PIF and Hyundai signed the agreement on the plant, which will have an annual production capacity of 50,000 electric and gas-powered cars and will be the first South Korean automobile factory in the Middle East, a joint statement said.
PIF will hold a 70% stake in the new joint venture with Hyundai holding the remaining 30%. Total investment for the project is estimated to exceed $500 million, it added.
Hyundai Motor Group, the world's No. 3 auto group by sales, is embarking on manufacturing in the Gulf state as Saudi Arabia has been trying to shift its economy away from oil and is aiming to manufacture more than 300,000 cars annually by 2030.
"Hyundai will also act as a strategic technology partner to support the development of the new manufacturing plant, by providing technical and commercial assistance," the statement said.
Yoon said the first cars would roll off the production line in 2026. No details were given on the precise location of the plant or the specific models which would be made there.
Yoon visited Saudi Arabia where he met with Saudi Crown Prince Mohammed bin Salman, the kingdom's de facto ruler. Yoon traveled with a delegation of business leaders including Hyundai Motor Group Executive Chair E.S. Chung.
Yoon and Prince Mohammed signed several agreements including on establishing strategic partnerships and developing "green" hydrogen, Saudi state news agency SPA reported.
(Reporting by Pesha Magid, Ju-min Park and Heekyong Yang; Writing by Aziz El Yaakoubi; Editing by John Stonestreet, David Holmes and Josie Kao)