Crown Prince announces King Salman Automotive Cluster in KAEC

Crown Prince Mohammed bin Salman

Crown Prince Mohammed bin Salman designated “King Salman Automotive Cluster" as the official name of the automotive manufacturing zone within King Abdullah Economic City (KAEC), the Saudi Press Agency reported.

The cluster is a crucial step in Saudi Arabia’s economic diversification and will be an enabler for the automotive sector and sustainable transportation, contributing to raising non-oil GDP and increasing exports.

It will also enhance the Saudi automotive sector by accelerating the local capacity growth in manufacturing and sector-related research and development, enabling supply chains to serve regional and international markets in a more efficient manner.

King Salman Automotive Cluster will be a core hub, comprising headquarters and factories for local and international players. Notable companies include Ceer, the first Saudi electric vehicle (EV) brand, and Lucid Motors, which opened its first international plant in KAEC in 2023.

It will also host several joint ventures (JVs) between the Public Investment Fund (PIF) and global manufacturers, including Hyundai Motor – establishing a highly automated plant for manufacturing cars in Saudi Arabia – and a JV agreement with Pirelli to set up a Saudi-based tire plant.

In addition, 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 corporates operating in King Salman Automotive Cluster will reach about SAR 92 billion by 2035.

This is besides contributing to the creation of many direct and indirect jobs, support the local manufacturing sector, and ramp up Saudi exports to regional and global markets, which will in turn positively impact the national balance of payments.

King Salman Automotive Cluster will leverage the supportive environment and investment incentives provided by KAEC, including its logistical infrastructure, together with its proximity to a highly-developed port in a vital location for global trade.

These factors are bound to provide opportunities for the local private sector and international players to engage as partners, suppliers, and investors in the automotive sector and its related services.

Furthermore, the new cluster will contribute to achieving Saudi Vision 2030, which aims to diversify the economy and achieve sustainable growth.

It will also be a key contributor to fulfilling the goals of the National Industrial Development and Logistics Program, which seeks to position Saudi Arabia as a leading industrial nation and a global logistics hub by developing high-growth sectors locally and attracting foreign investments. This is in addition to supporting objectives of other national strategies for industry, transport and logistics.