The automotive industry in Saudi Arabia..An ambitious plan reinforced by the industrial strategy

The Saudi industrial strategy prioritizes about 12 sectors, including the automotive industry. The beginning was the laying of the foundation stone for the Lucid factory in Jeddah, then the announcement of the Saudi brand for the manufacture of electric cars, CEER.

Saudi Arabia’s entry into the automotive industry is a project that has been waiting for decades, but it is now at the heart of the national strategy for the industry, which was approved by the Council of Ministers last month.

Read more: Mohammed bin Salman launches the first Saudi company to manufacture electric cars

The Kingdom is the largest car market in the Arab region with 550,000 light vehicles sold in the last year before the Corona pandemic, followed by the UAE with around 250,000 cars.

Saudi Arabia and the UAE together account for about 4.5% of the global car market, which was close to 90 million cars before the pandemic.

The local market provides a platform to launch the automotive industry before moving on to exports. But the most important strategic consideration is that Saudi Arabia is entering this industry at a time when the sector is witnessing a turning point globally with the expansion of the electric and hybrid car industry.

It is expected that by 2030, the share of conventional cars powered by internal combustion engines will fall to 49%, compared to 30% for hybrid cars and 21% for electric cars.

Read more: The Minister of Investment: Talks with two car manufacturers in Saudi Arabia, apart from “Lucid”

Against this background, the strategy aims to establish two factories for electric cars in the Kingdom with an annual production of 300,000 cars. The foundation stone has already been laid for the Lucid plant, whose production will reach 100,000 cars, and the CEER mark in the Public Investment Fund has been launched.

The automotive industry’s strategy does not stop at assembly, but rather includes 13 components that enter into different levels of the supply chain, starting with seats, tires, air conditioning and heating systems, to glass, lithium batteries and engines, and this qualifies Saudi Arabia. Arabia will become a regional center for the automotive industry and its components.

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