Saudi Arabia Comes to Michigan to Present Picture of the “Next Automotive Hub”
Saudi Arabia is the largest importer of cars and automotive parts in the Middle East and is a gateway for distribution to the broader Middle East and North Africa region. The U.S.- Saudi Arabian Business Council (USSABC) is hosting a half day program on June 26, 2013 at The Townsend Hotel in Birmingham to introduce OEMs, tier suppliers and aftermarket providers to the opportunities for sales, technical tie-ups, joint venture and investment in Saudi Arabia and to meet with government and private sector players who are driving the market.
New vehicle sales in Saudi Arabia are booming. Chrysler sales in the country jumped 80 percent in 2012 over the previous year. Ford sales were up 60 percent in 2011. GM’s largest dealer in the Middle East is in Saudi Arabia. Total vehicle sales in in Saudi Arabia in 2012 totaled more than 760,000 and the market is growing at a rate of 6.7 percent per year. Driving this demand is a rising level of disposable income and a large youth population – two-thirds of the population is under 30 years of age.
Saudi Arabia’s automobile accessories, repair, and after-sales service equipment market has been valued at more than $2.5 billion while the Middle East spare parts and accessories trade is valued at around $11 billion.
OEMs are also giving Saudi Arabia a new look. Isuzu began light truck assembly in the country in 2012 and Jaguar/Land Rover (JLR) has signed a Letter of Intent to build a manufacturing plant that could be producing 50,000 vehicles per year by 2017. Mercedes and Volvo have had truck assembly operations in the country for some time. Among the Tier 1 suppliers, Johnson Controls and Denso already have active joint venture operations in the country.
Saudi Arabia is positioning itself as a new automotive production and distribution hub for the MENA region and beyond. They offer a full menu of incentives and infrastructure support as well as a strong base of manufacturing inputs. Saudi Arabia is home to the Saudi Basic Industries Corporation (SABIC), a world leader in plastics technology with more than half a century of service to the global automotive industry. The company has one of the broadest portfolios of material solutions for the industry, including up to 60 percent of the plastics used in cars today. Sadara Chemical Company, an estimated $20 billion joint venture between The Dow Chemical Company and Saudi Aramco, is now under construction and will be one of the world’s largest integrated chemical facilities with product applications serving automotive parts as well.
Providing another important feeder product for the industry, Saudi Arabian Mining Company (Ma’aden) and Alcoa will operate one of the largest and lowest cost integrated aluminum facilities in the world. The $10.8 billion joint venture will comprise a bauxite mine, aluminum refinery, aluminum smelter, and rolling mill. Tata Motors’ Chairman Ratan Tata was quoted in an Indian car magazine as saying that one of the reasons his company is interested in setting up an operation in Saudi Arabia is to be near the Ma’aden/Alcoa’s complex. JLR is one of the mainstream motoring brands that has adopted aluminum bodies in its some of its road cars to help reduce vehicle weight.
The USSABC conference and networking lunch will bring together Saudi government and industry leaders, U.S. corporations (such as GM, Dow, Alcoa, and others who are benefiting from the market now), Saudi dealers for Chrysler, GM, and Toyota, as well as some of the country’s leading auto parts importers. For registration and additional information about the program go to www.us-sabc.org/autoconference.
About the USSABC
The U.S.-Saudi Arabian Business Council (USSABC) was established in December 1993 to improve the mutual knowledge and understanding between the private sectors of the U.S and Saudi Arabia and to promote and facilitate increased trade and investment between the two countries. The USSABC has built a membership base of approximately 350 leading companies in the U.S. and Saudi Arabia and serves as the central source of information and assistance for companies that want to pursue specific business activities in Saudi Arabia. The USSABC organizes conferences and seminars in both countries to promote dialogue between the two private sectors, as well as trade and investment missions that provide networking opportunities for U.S. and Saudi companies. For more information on the Business Council, please visit www.us-sabc.org
Vice President, Business Advisory Services
U.S.-Saudi Arabian Business Council
Phone: (703) 962-9300