Tuesday, February 18th, 2014
SEOUL, KOREA - Daewoo International Corp. will push forward with a plan to build an automobile assembly plant in Saudi Arabia. At the request of an automotive unit of Al Shafar Group, the US$1-billion project will involve the whole process from design to actual production. The Public Investment Fund of Saudi Arabia, the sovereign wealth fund of the Kingdom, will be an investor to the project.
According to POSCO Group, the parent company of Daewoo International, on February 17, newly appointed POSCO Group chairman Kwon Oh-joon will meet Abdulrahman Almofadhi, secretary general of the Saudi sovereign wealth fund, and discuss ways to cooperate in the construction of the automobile plant.
Once completed, the auto plant will be capable of producing 150,000 cars a year from 2017. An area near the country's capital Riyadh and the eastern coastal city of Dammam are discussed as strong candidate sites.
The main aim of the Saudi government in this effort is to produce a "Volkswagen" for everyone in its country to purchase and drive. To that end, the government will seek to transfer as much automotive technology as possible while trying to export finished cars to nearby countries. For all this to be realized, the country will need technology and parts supply from countries like Korea.
The country of 29 million population is a sizable automobile market, with about 700,000 cars sold a year. The Saudi government has thus far sought alliances with auto makers in Malaysia to no avail, as the Malaysian car makers have insufficient capabilities in automobile design or parts supply.
