With more and more trucking firms including Jaguar/Land Rover and Isuzu of Japan entering Saudi Arabia in a big way due to its low energy costs, a pro-business environment, and availability of raw material, the country is fast becoming the region's automobile hub, said an expert.
The Saudi Government too has taken a number of steps to build an automotive cluster in the country, said a statement from the US-Saudi Arabian Business Council (USSABC) which is hosting a major conference in Michigan on June 26.
The conference, titled "Saudi Arabia: New Auto Market Hub for the Middle East, Africa,and South Asia," will bring together senior Saudi Government officials, major Saudi industrialists, and leading OEMs to highlight the advantages of doing business in the Middle East's largest car market.
Isuzu of Japan is already assembling light trucks in Saudi Arabia and Jaguar/Land Rover has recently signed a letter of intent to build a manufacturing plant as well, said experts at the business council.
According to them, Saudi Arabia has several key advantages as it is home to the Saudi Basic Industries Corporation (SABIC), a world leader in automotive plastics technology, and also boasts one of the world's largest integrated aluminum production facilities, a joint venture of Alcoa and Ma'aden, Saudi Arabia's leading mining corporation.
The powerhouse market of South Asia - approximately one-fifth of the world's consumers - is within easy reach by air and sea, they added.
Low energy costs, a pro-business environment, and the availability of raw material inputs for vehicle "lightweighting" are drawing the attention of OEMs and automotive component suppliers worldwide.
Besides, the rising auto sales in Saudi Arabia and other emerging markets in the region has also put the country on the map for OEMs looking to tap into new growth opportunities, the experts added.
The country also has tariff free access to the 1.2 million annual auto market of the GCC nations and has rapid access to more than 400 million consumers in the Mena region.
Saudi Arabia's vehicle sales totaled 759,000 in 2011 and are expected to pass the one million per year mark by 2018.
The confirmed speakers for the event include Dr Tawfig Alrabiah, Saudi Minister of Commerce and Industry; Mohamed Al-Mady, Saudi Arabian co-chairman of the USSABC and vice chairman and CEO of Sabic; Peter Robertson, US co-chairman of the USSABC and former vice chairman of Chevron Corporation; and Azzam Shalabi, the president, National Industrial Clusters Development Program.
The invited speakers include representatives from the Royal Commission for Jubail and Yanbu, General Motors, Isuzu, and Land Rover.
The USSABC has a membership base of 400 leading companies in the US 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.