PIF, Pirelli to establish US$550 mn tyre plant in Saudi Arabia

PIF, Pirelli to establish US$550 mn tyre plant in Saudi ArabiaThe Public Investment Fund (PIF) and Italy’s Pirelli Tyre have officially tied up in an agreement to construct a tyre manufacturing facility in Saudi Arabia.

PIF will have a 75% majority stake, with Pirelli holding the remaining 25% in the jv that will target production for 2026, with an anticipated annual production capacity of 3.5 million units of passenger car tyres.

This joint venture aims to produce tyres bearing the Pirelli brand for passenger vehicles. Additionally, the facility will introduce a new local brand targeting both domestic and regional markets. The ambitious venture comes with a substantial investment of approximately US$550 million, making it a significant player in Saudi Arabia’s burgeoning automotive industry.

Saudi Arabia, with aspirations to become a global automotive manufacturing hub by 2030, is witnessing transformative initiatives led by PIF.

The current venture follows PIF’s recent collaboration with Hyundai Motor Company, resulting in a groundbreaking US$500 million joint venture to establish an automotive manufacturing plant. The launch of Tasaru, the National Automotive and Mobility Investment Company, further underscores Saudi Arabia’s commitment to localising automotive supply chains and manufacturing capabilities.

In line with its commitment to the future of mobility, PIF has not only spearheaded the establishment of Ceer, Saudi Arabia’s inaugural national electric vehicle brand but has also invested in Lucid Motors, whose international manufacturing plant is now operational in Saudi Arabia.

As a global tyre manufacturing leader, Pirelli is set to provide crucial technical support and expertise for the design, development, and operation of the new plant.

Yazeed A. Al-Humied, Deputy Governor and Head of MENA Investments at PIF, expressed, “Through this joint venture with Pirelli, PIF is building production capabilities in the automotive and mobility value chain, enhancing opportunities for private sector contribution. This collaboration marks another pivotal milestone in our journey to diversify the economy, enhance sustainability, and localise manufacturing capabilities in Saudi Arabia.”

Marco Tronchetti Provera, Executive Vice Chairman of Pirelli, stated, “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.”