Saudi Arabia has taken a significant step toward establishing a homegrown automotive sector by signing a Memorandum of Understanding (MoU) with Stellantis and Petromin Corporation. The Ministry of Investment of Saudi Arabia and the National Industrial Development Center formalized the agreement during the U.S.–Saudi Investment Forum. The partnership aims to evaluate the feasibility of Local Vehicle Production across both passenger and commercial segments.
In their joint statement, the parties emphasized that “the project aims to increase localization rates within the vehicle sector, contributing to the growth and sustainability of the automotive industry in Saudi Arabia.” This marks a pivotal moment in the kingdom’s strategy to diversify its economy and expand industrial capabilities.
Strategic Purpose: Localization, Investment, and Sustainable Growth
The MoU outlines a coordinated effort to assess the potential for a manufacturing facility capable of supporting large-scale Local Vehicle Production. The evaluation will focus on building supply chains, boosting local content, and preparing an industrial ecosystem capable of supporting long-term output.
The agreement highlights that the initiative will evaluate the feasibility of developing a manufacturing plant to localise both commercial and passenger vehicle production. This supports the goals of Saudi Vision 2030, which prioritizes advanced manufacturing, reduced reliance on imports, and expanded private-sector participation. By accelerating Local Vehicle Production, the kingdom aims to attract new investment. It also seeks to strengthen regional supply chains. The plan further supports the modernization of its industrial infrastructure.
Key Partners and Their Roles
Each stakeholder brings complementary strengths to the initiative.
- MISA and NIDC will handle regulatory alignment and policy support to ensure the project meets national development targets.
- Stellantis, one of the world’s largest automotive manufacturers, will lead efforts in industrialization, localization, and the evaluation of electrification opportunities for future models.
- Petromin Corporation, a major Saudi mobility services company, is positioned as a potential investor and will contribute local market insight and operational experience.
A statement from the partners noted: “We congratulate our partners for signing the MoU that paves the way for a distinctive investment partnership, which reflects the attractiveness of the Kingdom as a leading destination for global investments.”
What This Means for Saudi Arabia’s Automotive Future
If the feasibility study proves successful, the kingdom could soon begin building a foundation for Local Vehicle Production. This development could create new jobs across the country. It would also support small and medium-sized enterprises. The shift could help nurture a stronger and more competitive supply chain.
The partners added that the project would reinforce regional supply chains. They also said it would stimulate the growth of small and medium-sized enterprises. Together, these changes signal a potentially transformative impact on the sector.
For Stellantis, the MoU opens access to a promising market. Saudi Arabia supports industrial self-reliance and economic growth. More details on the project will be shared after evaluations.
With this agreement, Local Vehicle Production moves from concept to early planning. It marks the first steps toward a stronger local automotive sector.
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