Saudi Arabia’s Public Investment Fund (PIF) has joined forces with Italy’s Pirelli to develop a $550 million tire manufacturing facility in the Kingdom. Under this joint venture, PIF will own a 75 percent stake, with Pirelli holding the remaining 25 percent. Pirelli, a globally renowned tire manufacturer, will also serve as a strategic technology partner, providing technical and commercial support to the project. The new plant, set to become operational by 2026, will produce Pirelli-branded tires for passenger vehicles and introduce a new local brand to serve both domestic and regional markets. PIF sees this partnership as a step toward localizing automotive production and expanding opportunities for private sector involvement in the industry. The facility is expected to have an annual production capacity of 3.5 million tire units, contributing to Saudi Arabia’s economic diversification efforts.
The transaction’s closure is contingent on approvals from relevant authorities and fulfillment of certain agreement conditions. PIF has been actively investing in the automotive sector, aiming to boost the Kingdom’s economic diversification. In addition to this venture with Pirelli, PIF launched Tasaru in October, a company dedicated to developing local supply chain capabilities for the automotive and mobility industry. The fund has also made substantial investments in future mobility, establishing Saudi Arabia’s first national electric vehicle brand, Ceer, in partnership with Foxconn, and investing in US-based Lucid Motors. Moreover, PIF recently introduced a program to enhance portfolio management skills in the Kingdom’s capital market, offering upskilling opportunities in investment strategies and risk management techniques for Saudi nationals with a minimum of three years of portfolio management experience and fluency in English. This program will be officially launched in the first quarter of 2024 and is accessible free of cost through the fund’s website.