JEDDAH, 4 February 2008 — Saudi Arabia intends to establish its first car manufacturing plant in the eastern city of Dammam. The Saudi Authority for Industrial Cities and Technological Regions (SACTR) has reached an agreement with the Gulf Automobile Manufacturing Company to set up the plant with a capital of SR375 million.
Toufique Al-Rabeea, director general of SACTR, said the factory would be shifted to the new industrial city in Sudair, where three million square meters would be allocated for the facility. It will produce 300,000 cars in the second phase.
Rabeea said there is good prospect for car manufacturing factories in the Kingdom, which currently imports vehicles worth more than SR22 billion annually. Car sales in 2008 are expected to rise by 27 percent compared to last year.
“A long journey begins with the first step,” Rabeea said expressing his optimism about the future of car industry in Saudi Arabia.
“We have to achieve quality and make innovative designs, matching with world standards. It’s not impossible if we have the will and ready to work hard,” he said.
Rabeea expected the opening of several car manufacturing companies in the Kingdom within the next 10 years to meet requirements of the country’s fast growing population.
He emphasized the authority’s plan to promote strategic industries in the Kingdom. “Investment in car industry is no more a dream in the light of modern economic trends,” he added.
“We’ll remove all obstacles facing serious industrialists or investors who want to establish value-added industries in the country,” Rabeea said.
Industries, he said, play a big role in boosting the Kingdom’s economy and supporting its diversification drive, thus reducing dependence on oil resources. “They will create more job opportunities for young Saudis,” he added.
He said many essential parts required by the automobile industry are now available in the Kingdom. They includes light systems, breaks, wind-screens, batteries, engine oils and exhaust pipes.
Nasser Al-Hajri, chairman of the Gulf company, said the authority has offered all incentives to establish the factory, adding that he was holding talks with four Saudi investors to establish the plant in Dammam. He hoped that manufacturing in the factory could start within a year.
In the first phase, the factory will have a capacity of 15,000 cars. When the factory is shifted to its new facility in Sudair the capacity will grow to 300,000 cars.
“We selected the Kingdom for our expansion plan considering the availability of young and talented Saudi technicians in the field,” Hajri said. “We’ll provide Saudis with intensive training.”
At present Hajri’s company runs an automobile factory in Abu Dhabi to manufacture light trucks.
Hajri said he has been cherishing the idea since 1988 when he was an engineering student in the UK. “At that time I was thinking of manufacturing cars suitable for the people of the Gulf and other Arab countries,” he said.
Hajri said his company was receiving technical support from manufacturers in different countries. “We import parts from well known international companies,” he added. “This year we want to produce 3,000 cars at our Abu Dhabi plant.” His company currently employs 300 workers including technicians. “Their number will reach 50,000 in the coming 10 years,” he said.
“The automobile trade in the Kingdom depends on the Saudi economy. The availability of all models in the Kingdom has helped in balancing prices,” said Najeeb Al-Eissa, a Saudi businessmen who has investments in cars. He said there was only a minor increase in car prices in the Kingdom compared to other Gulf countries.