Hyundai Motor Company has commenced construction on its first Middle Eastern manufacturing facility in Saudi Arabia's King Abdullah Economic City. This blog explores the implications of Hyundai's investment for the region's manufacturing sector and what it means for businesses eyeing expansion into Saudi Arabia.
With a planned annual output of 50,000 vehicles, including electric models, this venture signifies a major step in the Kingdom's industrial evolution. Gain insights into the opportunities and considerations for establishing manufacturing operations in Saudi Arabia's burgeoning economic zones.
Saudi Arabia just got a major vote of confidence. Hyundai Motor Company, in partnership with the Public Investment Fund (PIF), has officially broken ground on its first-ever manufacturing facility in the Middle East. And they didn’t choose just any location, they chose King Abdullah Economic City (KAEC), a rising star on the Red Sea coast.
If you’ve been watching Saudi Arabia’s evolving business landscape, this move is worth your attention.
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When a global player like Hyundai commits $500 million to build a factory in Saudi Arabia, the signal is clear: the Kingdom is open for manufacturing, and it’s ready to scale.
This new facility is more than bricks and mortar. It’s the first phase of a much bigger plan, the King Salman Automotive Cluster, designed to turn KAEC into the beating heart of the Kingdom’s car manufacturing industry. By 2026, Hyundai expects the plant to produce 50,000 vehicles a year, including electric and traditional models.
Why is this significant? Because until now, Saudi Arabia has been known more for importing cars than making them. That’s changing fast.
Located just 100km north of Jeddah, KAEC offers something few locations in the region can match:
It’s no coincidence that other brands, like Lucid Motors, have also chosen KAEC for manufacturing. The city has quietly positioned itself as a smart alternative to the crowded and costlier UAE zones.
And now, with Hyundai’s move, KAEC is no longer a promising concept, it’s a reality in motion.
The message for international business leaders is clear: manufacturing in Saudi Arabia isn’t a future trend, it’s happening now.
Hyundai’s choice to build locally shows confidence in more than just market demand. It reflects faith in the Kingdom’s regulatory reforms, economic stability, and its ambition to become a regional industrial hub.
If you’re leading a business that’s been eyeing expansion in the region, it’s time to ask: where does Saudi Arabia fit in your growth plan?
Let’s be honest, setting up in Saudi Arabia isn’t as simple as flipping a switch. There’s a 20-step setup process, multiple ministries involved, and a regulatory environment that’s evolving fast. And unlike neighbouring UAE, costs can be 10x higher upfront.
But there’s a reason global companies from Amazon to Best Western have trusted Peninsula to lead them through the process.
We’ve been operating in the Kingdom for over 15 years. Our team knows how to navigate the maze, from commercial registration and licensing, to forming local partnerships and securing the right approvals. We don’t just tick boxes. We de-risk the journey.
Peninsula offers a free consultation to help you assess whether the Kingdom is right for your next move. We’ll walk you through your options, outline the real costs, and help you build a plan with confidence.
Alistair Paine brings 15 years of dedicated experience in Saudi market entry, guiding Fortune 500 companies and innovative scale-ups through successful establishment in the Kingdom. His expertise in Saudi company formation, licensing and market entry strategy, positions him as a leading authority and consultant in international business expansion to Saudi Arabia.
Schedule a free consultation with Alistair and the Peninsula team to understand which market entry strategy is best suited to your business setup in Saudi Arabia.
Email: Alistair@peninsulacs.com
