Saudi seeks to become major car manufacturer

Saudi Arabia may become a leading car manufacturer if the kingdom’s new agency can demonstrate the feasibility of producing vehicles and parts for one of the world’s largest car companies.

Toyota Motor Corp signed a memorandum of understanding (MOU) with the Saudi Arabian government yesterday to look at the possibility of producing vehicles and parts in the country.

The move, if firmed up, would be a big step for the Saudi economy as the government tries to diversify beyond oil exports and create jobs as part of its 2030 Vision.

So far, Saudi Arabia and other Gulf oil exporters have failed to significantly develop industries such as car manufacturing because they lack broad industrial bases and a skilled local workforce.

“The study would take into account the evaluation of development of a local supply base using materials produced by major Saudi companies like Sabic, Maaden, Petro Rabigh, and other major industrial companies in the kingdom,” the official Saudi state news agency reported.

Meanwhile, state-run Saudi Aramco has signed MOUs with five Japanese entities during a business forum held yesterday, coinciding with a visit by Saudi Arabia’s King Salman this week.

Toyota remains the leader in the Saudi Arabian and GCC car markets with more than 500,000 units sold in GCC in 2016.