By 2030, Saudi Arabia aims to become a global leader in automobile manufacturing. The Public Investment Fund (PIF), the country’s sovereign wealth fund, invests in projects and forms joint ventures to achieve this goal.
To attract further investment into Saudi Arabia while implementing sustainability, PIF joined hands with Pirelli Tyre, an international tire manufacturer, to build a facility dedicated to tire manufacturing and production.
A $550 million tire factory is set to be built in Saudi Arabia and is expected to generate an annual production capacity of 3.5 million units. To start production in 2026, PIF will hold a 75% stake, while Pirelli will hold 25% and serve as a strategic technology partner in supporting the project’s development.
Pirelli, which will also act as a strategic technology partner in the new facility to support the project’s development by providing technical and commercial assistance, will become the first tier 1 tire maker to directly source production in Saudi Arabia per its local-for-local strategy.
The facility will also manufacture and market tires under a new local brand targeting the domestic and regional markets.
“Through this Joint Venture with Pirelli, PIF is building production capabilities in the automotive and mobility value chain and enhancing opportunities for private sector contribution,” says Yazeed A Al-Humied, Deputy Governor and Head of MENA Investments at PIF.
“Accessing local production in Saudi Arabia, one of the most promising markets today, in line with our positioning in high value and electric, represents a great opportunity for Pirelli. Capturing it alongside a partner like PIF with its plans to enable the automotive sector,” says Marco Tronchetti Provera, Executive Vice Chairman of Pirelli.
Recently, PIF and Hyundai Motor Company announced a collaboration to establish an automotive manufacturing plant in Saudi Arabia, while Tasaru, the National Automotive and Mobility Investment Company, was launched to localize automotive supply chains and manufacturing capabilities.
Ceer, Saudi Arabia’s first national electric vehicle (EV) brand, was also formed. The kingdom oversaw partnerships with Lucid Motors, which opened its first international manufacturing plant in the country.