Saudi Arabia signs deal with South Korean company to build cars
King Saud University has signed a $500 million deal with South Korean company Digm Automotive Technologies to build low cost cars for the Gulf region and North Africa.
The car, imaginatively named Sedan-1 (pictured above), will be a five seat passenger vehicle, priced between AU$9,500-$12,000.
The university will fund 10 percent, Digm Automotive 30 percent while the rest will be funded by investors. Digm Automotive will lead in setting up the manufacturing process, said to be based in Saudi Arabia.
“The move comes as part of the university’s efforts to transfer technology and establish a knowledge-based economy,” said KSU President Abdullah Al-Othman at the signing of the deal. “Feasibility studies have proved that there is a good market for low-cost cars.”
According to Digm Automotive, the fact that the University was able to make the car at a low cost, but keep the quality high - usually the two being mutually exclusive - won them over to sign the deal.
Saudi Arabia currently imports over half a million vehicles each year, and the move to manufacture them is designed to keep money in the country.
Abdul Rahman Al-Ahmari, supervisor of the advanced manufacturing center at the university, told Arab News, “This will pave the way for establishing a full-fledged car manufacturing company in the Kingdom.”.
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