The U.S.-Saudi Business Council (USSBC) recently participated in the first edition of the KSA AutoConnect Forum from November 8-9, 2023, in King Abdullah Economic City (KAEC), a relatively new city in Saudi Arabia recently designated as a special economic zone. Located on the Red Sea, KAEC is focused on the development of clusters related to logistics, automotive, FMCG, packaging, logistics, and healthcare. Mars, IKEA, Pfizer, Lucid, and Ceer are among over 200 companies that have a presence in KAEC.
The two-day event, consisting of series of 30-minute presentations, was organized by the Ministry of Industry and Mineral Resources (MIMR), the Ministry of Investment (MISA), and the National Industrial Development Center (NIC) and sponsored by KAEC, the Economic Cities and Special Zones Authority (ECZA), and SBT, a portfolio company of Xenel Group, board member of the USSBC. Speakers from MIMR, NIC, MISA, Public Investment Fund (PIF), ECZA, and King Abdullah Port (located in KAEC), presented trends in the Saudi automotive sector as well as initiatives and business opportunities in the sector. Automakers Ceer, Lucid, and Human Horizons discussed their expansion plans. C-suite executives from Saudi based Dar Al-Himmah Projects Company Limited and SBT, and U.S.-based PAC Group, shared lessons in contributing to the development of the automotive sector, enabling discrete manufacturing, industry supply chains, and creating an automotive and mobility export zone in KAEC.
The exhibition floor hosted key local and international suppliers, government entities, and major electric vehicle manufacturers. The forum attracted over 1,300 participants from more than 20 countries representing 350+ companies involved in various aspects of automotive supply chains such as petrochemicals, mining, renewables, tire manufacturing, logistics, car seat manufacturing, and financing. Videos showcasing the information presented at the forum can be found on KSA AutoConnect’s YouTube channel.
During the Forum, the Council, represented by Vice President Ana Carmen Neboisa, assisted Lupsor System Inc., a U.S. manufacturer of an automotive safety product, with introductions to key participants and government stakeholders. Speaking on his positive experience at the Forum, Dr. George Alula, President and CEO of Lupsor System, remarked: “We are ensured the U.S.-Saudi Business Council’s experience will lead us to finalize our investment partnership search, product development, and market introduction endeavors… After just three days, we received the ‘Letter of Interest’ from a Saudi carmaker.”
Saudi Arabia has been the largest importer of cars and automotive parts in the Middle East for many years and serves as a gateway for distribution to the broader region. As part of Vision 2030’s development and diversification goals, the Kingdom has committed to developing its automotive manufacturing sector and aims to produce 300,000 vehicles by the end of the decade. Opportunities range from the development of a digital online spare parts distribution marketplace for the sales of both aftermarket parts and OEM parts, to manufacturing of parts for automotive HVAC, clips and retainers for automotive applications, interior lighting, speakers, etc.
A number of industry milestones were announced in 2023. Lucid Motors opened a manufacturing plant in KAEC in September, the first of its kind in the Kingdom. Ceer, a Saudi automaker, and Hyundai Motors agreed to establish a presence in Saudi Arabia. SNAM, a Saudi auto manufacturer, will produce South Korean SUVs and pick-up trucks. The Public Investment Fund (PIF) partnered with Pirelli to establish a $500 million tire manufacturing plant. PIF has also made investments in automakers such as Aston Martin and has established the National Automotive and Mobility Investment Company (Tasaru Mobility Investments), to develop industry supply chain capabilities in the Kingdom. Tasaru has also partnered with Zamil Group Real Estate Company, Abdullah Ibrahim Alkhorayef Sons Company and Dar Al-Himmah Projects Company Limited to develop an automotive logistics hub in KAEC dedicated to the aftermarket parts industry.
According to the National Center for Industrial Development, car sales in Saudi Arabia are expected to grow at a compound annual rate of 24 percent through 2025, with electric cars representing up to 7 percent of this growth. Today, there are 160 vehicle factories in operation in the Kingdom that manufacture a range of products such as cars, engine parts, and accessories for both traditional and electric vehicles.
Supporting U.S. companies enter the Saudi market is a core Council mission. Over its decades-long history, the Council has convened conferences and events to catalyze U.S. private sector partnerships across Saudi industries, including the automotive sector. In 2013, the Council organized a forum in Michigan which brought together Saudi stakeholders and American automotive firms. Because the auto supply chain ecosystem interlinks with defense, chemicals, logistics and other important sectors, the Council is planning to organize events and release industry information on opportunities in Saudi Arabia’s fast-developing automotive landscape in 2024. Follow the USSBC on LinkedIn and Twitter for updates and invitations to industry events.
