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SEOUL, May 15 (Yonhap) — Hyundai Motor Co. said Thursday it has broken ground on a production plant in Saudi Arabia, the company’s first manufacturing base in the Middle East, marking a key milestone for the company’s global expansion.

A groundbreaking ceremony for Hyundai Motor Manufacturing Middle East (HMMME) was held Wednesday (local time) at the King Salman Automotive Cluster, located within King Abdullah Economic City (KAEC) in Saudi Arabia, the company said.

HMMME is a joint venture between the South Korean automaker and Saudi’s Public Investment Fund (PIF) established under a 30-70 stake scheme. Production is scheduled to start in the fourth quarter of 2026 with an annual capacity of 50,000 units, including both electric vehicles (EVs) and internal combustion engine models.

The facility is a centerpiece of Saudi Arabia’s strategy to develop a domestic automotive industry, with the King Salman Automotive Cluster serving as the country’s new automotive manufacturing hub.

Wednesday’s ceremony was attended by over 200 dignitaries and officials from both countries, including Bandar Alkhorayef, Saudi Arabia’s industry minister, and Hyundai Motor Group Vice Chairman Chang Jae-hoon.

Chang said the groundbreaking signals the start of a new era for both Hyundai Motor and Saudi Arabia, and expressed hope that the plant will contribute to the country’s Vision 2030 initiative by fostering local talent equipped with mobility technology expertise.

“Today’s groundbreaking marks the beginning of a new chapter for both Saudi Arabia and Hyundai Motor, as we lay the foundation for a new era of future mobility and technological innovation,” Chang said.

Yazeed Alhumied, deputy governor of PIF, lauded the joint venture as underscoring the Saudi wealth fund’s “commitment to build local capabilities, attract cutting-edge technology, and create highly skilled jobs in Saudi Arabia’s automotive and mobility sector.”

Hyundai Motor said the new plant will generate thousands of jobs in Saudi Arabia, and allow for industry knowledge transfer and skill development.

“The localization of Hyundai’s vehicles will accelerate the growth of Saudi Arabia’s automotive and mobility ecosystem, and pave the way for a new industrial future,” the company said.

As part of the Vision 2030 strategy, Saudi Arabia is actively promoting the development of its automotive industry, as the Middle Eastern nation aims to diversify its growth engines while reducing its heavy dependence on the oil industry.

The South Korean automaker is seeking to establish a hydrogen mobility ecosystem in Saudi Arabia in partnership with the Korea Automotive Technology Institute, Air Products Qudra and the Saudi Public Transport Company.

Under the partnership, the parties plan to cooperate in various areas, including the creation of a hydrogen mobility environment and conducting a pilot project for hydrogen electric buses, as well as collaborating on relevant government-supported research programs.

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