Tata speculation engine for growth

06 September 2012

If major automotive manufacturer moves into Saudi Arabia, it could kick-start Gulf motor industry

The Ras al-Khair industrial city in the Eastern Province of Saudi Arabia is where the kingdom aims to fully develop its downstream minerals sector.

Aluminium production will play a vital role in that and the Saudi Arabian Mining Company (Maaden) and the US’ Alcoa are currently constructing a fully integrated complex to process the kingdom’s reserves of bauxite and turn them into primary metal.

The complex will merely act as an anchor, as Riyadh is hoping conversion industries, especially car manufacturers, will cluster around the site to use the aluminium being produced.

Recent comments by the chairman of India’s Tata Motors that the company could be interested in building an assembly there for its Jaguar Land Rover subsidiary is the first sign Ras al-Khair is beginning to be noticed by companies beyond the Middle East.

It would be interesting to know the full extent of Tata’s plans for the city. Experts say they do not think such a facility will be a full car assembly line, but instead would probably construct car sections for export.

All of this is speculation, but it would be unusual for a car manufacturer to enter a country with no history of car making and start assembling Jaguars and Range Rovers there.

To attract Jaguar Land Rover to Ras al-Khair would be an impressive feat, but the kingdom’s fledgling automotive industry needs to be nurtured over time, not fast-tracked. 

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