Saudi Arabia is working with US carmaker Stellantis and local firm Petromin to establish automotive production in the country.

Ministry of Investment of Saudi Arabia (MISA) and the National Industrial Development Center (NIDC) have signed a memorandum of understanding (MoU) with both the companies to assess the feasibility of establishing a vehicle production facility.

The initiative is intended to localise production of both commercial and passenger vehicles.

MISA Investment assistant minister Abdullah Al-Dubaikhi said : “The MoU with the Stellantis, one of the world’s largest automotive manufacturers, and in partnership with one of the leaders of the Automotive private sector in the Kingdom, Petromin Corporation, confirms the success of the Kingdom’s efforts—represented by the Ministry of Investment (MISA), the Ministry of Industry and Mineral Resources (MIM), and the National Industrial Development Center (NIDC), and other relevant stakeholders— to grow foreign direct investment flows into promising sectors, foremost among them the automotive manufacturing sector.”

The proposed project is framed as part of the country’s Vision 2030 economic diversification programme, which includes ambitions to develop advanced manufacturing capabilities.

MISA and NIDC are expected to support the industrial framework for the potential investment, with an emphasis on establishing a value chain for the sector.

Petromin is identified in the agreement as a potential investor, with a role focused on leveraging its local market understanding and operational experience.

Stellantis would lead efforts to introduce production of its models in the kingdom, with a focus on localisation and electrification.

Stellantis Middle East & Africa chief operating officer Samir Cherfan said: "This MoU is a strategic step toward building a future-ready automotive industry in the MEA region. Stellantis is committed to investing in local capabilities and delivering freedom of choice to customers while supporting the Region’s industrial ambitions and great growth potential."

According to the parties, the initiative is anticipated to create jobs, bolster regional supply chains and encourage the participation of small and medium-sized enterprises.

NIDC CEO Saleh Al-Solami added: "Our goal is to build a regional production hub with strong supplier capabilities. This partnership between Stellantis and Petromin accelerates that objective by combining global technology with local market strength."

The MoU was signed during a US-Saudi investment forum held in Washington.

It follows the 2022 business cooperation agreement between Stellantis and Petromin, which set out plans to build an industrial footprint in Saudi Arabia.