Italian tire manufacturer Pirelli has entered into a significant joint venture with the Public Investment Fund (PIF) to establish a tire manufacturing facility in Saudi Arabia. This ambitious project represents a total investment of $550 million and marks Pirelli as the first tier 1 tire manufacturer to set up production operations directly in the Kingdom.
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Joint Venture Structure
Under the terms of the joint venture, the Public Investment Fund will hold a substantial 75% stake, while Pirelli will retain the remaining 25%. Pirelli’s role will involve providing essential technical and commercial support throughout the development of the facility.
Production Timeline and Capacity
The new plant is projected to commence production in 2026 and aims to achieve an impressive production capacity of 3.5 million tire units annually. This output will play a crucial role in meeting local and regional demands for high-quality tires.
Product Offerings
The facility will produce premium tires specifically for passenger vehicles under the Pirelli brand. In addition, the venture plans to launch a new local tire brand that will cater primarily to the domestic and regional markets, diversifying its offerings and enhancing market presence.
Strategic Importance
This initiative aligns with Saudi Arabia’s broader strategy to strengthen its manufacturing capabilities within the automotive sector, with the ambitious goal of producing over 300,000 vehicles annually by 2030. The establishment of Pirelli’s manufacturing plant is expected to contribute significantly to this vision, fostering local industry and creating job opportunities in the region.
