Car industry offers potential

07 March 2011

It can only be a matter of time before a major car manufacturer starts production in Saudi Arabia

When the Saudi Arabian petrochemicals industry met for the Saudi Downstream 2011 conference at Yanbu, the emphasis was firmly aimed at the industry moving ever further downstream.

Most of the speakers talked about what the kingdom needs to do to increase the value of the chemicals it currently produces and how to do it as quickly as possible.

Saudi Basic Industries Corporation (Sabic) chief Mohammed al-Mady spelled out one particular vision by announcing that he wanted to see holding companies set up that would facilitate certain key growth areas, particularly in the automotive industry.

It is no secret that Saudi Arabia wants to develop a car industry, but it is only relatively recently that this vision has started to take a coherent shape.

With an eye on events happening around the Middle East and North Africa region, Saudi Arabia knows that jobs need to be created in the kingdom for the burgeoning young population that is now pouring out of colleges and universities.

The automotive industry makes sense in a number of ways for the kingdom. The access to cheap energy, raw materials and finance, the central geographical location and a young workforce that can be trained with the requisite skills are all major advantages.

After the battering many car manufacturers took during the global economic crisis, many of them must now be viewing the kingdom as an attractive place for expansion.

It can only be a matter of time before an announcement is made regarding the kingdom partnering with one of the major car manufacturers and building an assembly plant in Saudi Arabia.

All that remains is to see which car manufacturer will move in first.

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