As Saudi Arabia continues its push into the industrial and manufacturing sectors its Public Investment Fund (PIF) is partnering with Italy’s Pirelli Tyre to launch a tyre manufacturing plant in the country. The plant is expected to start production in 2026.
The companies had announced the partnership in 2023 with PIF taking a dominant role in the joint venture with a 75% stake, while Pirelli will hold the remaining 25%. In addition to its equity participation, Pirelli will also play a crucial role as a strategic technology partner. The company is expected to provide valuable technical and commercial assistance to ensure the success and global competitiveness of the project.
The plant is expected to generate an annual production capacity of 3.5 million units, manufacturing high-quality tyres for passenger vehicles, under the Pirelli brand, and will also manufacture and market tyres under a new local brand targeting the domestic and regional market. The total investment in the jv is around US$550 million.
The collaboration of PIF, a sovereign wealth fund with vast resources and ambitions, with Pirelli, a globally recognised leader in tyre manufacturing, is said to create a facility that will not only meet the demands of the regional market but also have a significant footprint in the global tyre industry.
Saudi Arabia is set to become a global automotive manufacturing hub by 2030. PIF has established a world-class automobile sector in Saudi Arabia by driving transformation and boosting manufacturing capabilities, infrastructure and supply chains in Saudi Arabia and beyond.
Among its major investments in the sector, PIF and Hyundai Motor Company also announced a landmark US$500 million JV to establish an automotive manufacturing plant in Saudi Arabia. And the launch of Tasaru, the National Automotive and Mobility Investment Company, which is dedicated to localizing automotive supply chains and manufacturing capabilities.
PIF has also made other significant investments in the future of mobility, including establishing Ceer, Saudi Arabia’s first national electric vehicle brand, as well as investing in Lucid Motors, which has opened its first international manufacturing plant in Saudi Arabia.