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Private Sector Investment in Saudi Economy Jumps 104%

The King Abdullah Financial District (KAFD) in Riyadh. (Asharq Al-Awast)
The King Abdullah Financial District (KAFD) in Riyadh. (Asharq Al-Awast)
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Private Sector Investment in Saudi Economy Jumps 104%

The King Abdullah Financial District (KAFD) in Riyadh. (Asharq Al-Awast)
The King Abdullah Financial District (KAFD) in Riyadh. (Asharq Al-Awast)

Non-governmental private sector investments in Saudi Arabia’s GDP for the past year increased 22 percent to reach $242 billion. Compared to 2016, investments witnessed a considerable jump, reaching 104 percent, despite the impact of the coronavirus pandemic on economic activities worldwide.

The Saudi government is seeking to empower the private sector and raise its contribution to the gross domestic product from 40 to 65 percent as a target for 2030.

Saudi Arabia inaugurated the Private Sector Partnership Reinforcement Program (Shareek) to strengthen government and private sector collaboration, which he said would enable private investment of $1.33 trillion until 2030.

Job creation

According to a recent report by the Ministry of Investment, a copy of which was seen by Asharq Al-Awsat, the impact of the methodology of structural and economic reforms since the launch of Vision 2030 is visible through the growth of the non-oil private sector in recent years as part of the country's plan to reduce its dependence on oil.

The report revealed that the number of Saudi workers in the private sector increased by 58 percent during the fourth quarter of last year, while that rate reached 42 percent in the government sector.

It stressed the importance of supporting and enabling the private sector to operate within its maximum potential, which will reflect on the Saudi economy and generate job opportunities, thereby reducing unemployment and achieving social and economic well-being.

Shareek Program

In the presence of Crown Prince Mohammad bin Salman bin Abdulaziz, Saudi Arabia had announced in March the first wave of projects supported by the Shareek program, designed to help unlock the full potential of Saudi Arabia's private sector and contribute to achieving the national targets defined by Vision 2030."

The Crown Prince is also the Chairman of the Large Companies Investment Committee.

The ceremony witnessed the signing of several agreements for 12 projects that will be implemented by eight companies in several strategic and vital sectors.

The projects will boost the economic growth of Saudi Arabia, localizing industries, stimulating innovation, and strengthening the partnership between the government and private sectors.

First package of projects

Shareek CEO Abdulaziz al-Arifi said the total value of the projects announced during the ceremony are worth to about $51.2 billion.

The share of major companies' investments represents $32 billion, and its impact on the domestic product will reach around $124.2 billion over the next two decades, said Arifi.

He added that the projects will develop the growth of eight national companies and help to raising their competitive potential at the international level.

They will also help create a high positive impact across entire value chains, which provides excellent investment opportunities for a more significant segment of companies in the private sector.

Large businesses

The first package of supported projects will have an economic and strategic impact on several economic sectors in the country and provide 64,400 new job opportunities.

Large companies are a significant driver of economies around the world. Their investment growth affects the economic activity of the investment system in general and contributes to supporting projects that increase the value of investments and diversification of portfolios.

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Business

Hyundai Motor to Roll Out In-House Driver-Assist System in 2029

The logo of Hyundai Motor India Limited is seen outside a car showroom, in Ahmedabad, India, October 7, 2024. (Reuters)
The logo of Hyundai Motor India Limited is seen outside a car showroom, in Ahmedabad, India, October 7, 2024. (Reuters)
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Hyundai Motor to Roll Out In-House Driver-Assist System in 2029

The logo of Hyundai Motor India Limited is seen outside a car showroom, in Ahmedabad, India, October 7, 2024. (Reuters)
The logo of Hyundai Motor India Limited is seen outside a car showroom, in Ahmedabad, India, October 7, 2024. (Reuters)

Hyundai Motor Group ‌will launch vehicles equipped with its proprietary driver-assistance software in late 2029, two years later than planned, turning to Nvidia in the interim to accelerate deployment.

The South Korean automaker will partner with the US chipmaker to roll out advanced driver-assistance systems (ADAS), known as Level 2+ and Level 2++, in 2028, a Hyundai executive said.

The shift underscores the challenges Hyundai faces in developing automated driving software in-house, a project originally slated for a late-2027 debut, while raising concerns over its deepening reliance on Nvidia.

The delay has fuelled worries that the automaker could ‌fall further behind Tesla ‌and Chinese rivals in the race to commercialise ‌vehicle ⁠autonomy.

"Our partnership with ⁠Nvidia is not about leaving our destiny entirely in their hands," Park Min-woo, a president at Hyundai Motor Group, told a media briefing.

Park said Hyundai will co-design the technology with Nvidia and use the data from the system to train and refine its own software platform, dubbed Atria.

Park, a former Nvidia executive who joined Hyundai in January, ⁠has spearheaded the automaker's deepening ties with the chipmaker. ‌His strategy marks a shift ‌from that of his predecessor, Song Chang-hyeon, who focused heavily on internal software development ‌before his abrupt departure in December.

Hyundai vehicles powered by ‌Nvidia's Hyperion 10 platform will initially bypass expensive lidar sensors in favour of cameras, ultrasonic sensors and a radar, Park said.

However, Hyundai is considering lidar for its Level 3 automated systems, which allow hands-off driving under specific conditions.

"To ‌truly ensure safety, we believe sensor redundancy is critical: if one sensor fails, others must be able ⁠to maintain safe ⁠operation," Park said, without providing a timeline for Level 3 commercialisation.

Hyundai and affiliate Kia Corp, which together rank as the world's third-largest automaker with annual sales exceeding 7 million vehicles, plan to use their global fleet scale to harvest data to train their autonomous driving technology, Park said. Hyundai said it expects to surpass competitors in accumulated driving data by 2033.

Hyundai Motor Group is deepening collaboration with Nvidia spanning autonomous driving, artificial intelligence data centers and humanoid robots developed by Hyundai-owned Boston Dynamics.

"Level 2+" generally refers to more capable driver-assistance systems that work on highways, while "Level 2++" systems can handle more complex urban driving, similar to Tesla's Full Self-Driving system. Both still require driver supervision.

Business

S&P Global Ratings Affirms Saudi Arabia Credit Rating at A+ with Stable Outlook

An aerial view of the Financial District in Riyadh (SPA)
An aerial view of the Financial District in Riyadh (SPA)
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S&P Global Ratings Affirms Saudi Arabia Credit Rating at A+ with Stable Outlook

An aerial view of the Financial District in Riyadh (SPA)
An aerial view of the Financial District in Riyadh (SPA)

Credit rating agency S&P Global affirmed Saudi Arabia's credit rating at A+ with a stable outlook, according to its latest report.

It stated that the stable outlook reflects its view that Saudi Arabia will be able to withstand pressures stemming from the ongoing Middle East conflict.

This takes into account the Kingdom's diversified energy export infrastructure, including its ability to redirect crude oil exports to the Red Sea through the East-West oil pipeline, as well as its substantial oil storage and refining capacity both domestically and abroad.

The agency also noted that the stable outlook reflects continued non-oil growth momentum and associated non-oil revenue, together with the government's ability to calibrate investment expenditure linked to Saudi Vision 2030, which should continue to support the economy and fiscal trajectory.

Despite the conflict, non-oil activity has remained reasonably resilient, supported by consumer spending.

S&P expects real GDP to contract by 0.9% in 2026 before rebounding sharply by 8.2% in 2027, supported by an increase in oil production, and to average 3.3% in 2028-2029.

The non-oil sector, including government activities, now accounts for about 70% of GDP, up from 65% in 2018, reflecting continued structural progress in economic diversification.

The agency further highlighted Saudi Arabia's substantial net general government asset position as a key strength and noted that foreign-exchange reserves reached their highest level since early 2020.

It stated that the ongoing recalibration of Saudi Vision 2030 project implementation should support fiscal resilience. S&P also expects the Kingdom to continue adopting a prudent and flexible approach in this regard, having stressed its commitment to achieving Saudi Vision 2030 goals without jeopardizing public finances.

The agency noted that ongoing structural reforms will remain important in supporting non-oil growth.

Business

CEER to Reveal First Flagship Vehicles in Saudi Arabia on Sept. 21

A glimpse of the car's design that CEER aims to launch later this September (Asharq Al-Awsat)
A glimpse of the car's design that CEER aims to launch later this September (Asharq Al-Awsat)
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CEER to Reveal First Flagship Vehicles in Saudi Arabia on Sept. 21

A glimpse of the car's design that CEER aims to launch later this September (Asharq Al-Awsat)
A glimpse of the car's design that CEER aims to launch later this September (Asharq Al-Awsat)

CEER, Saudi Arabia's first automotive company and Original Equipment Manufacturer (OEM), has announced the reveal date of the world premiere of its first flagship vehicles, an electric sedan and SUV, on September 21.

Friday’s announcement reflects the Kingdom’s strategic direction toward developing an advanced industrial sector aligned with the objectives of Saudi Vision 2030 and strengthening Saudi Arabia’s position on the global automotive industry map.

“At the beginning of this year, we said that 2026 is the year of CEER. I am happy to announce that we’ve set the date for the reveal of our first flagship vehicles,” said CEO of CEER James DeLuca.

“The world is about to witness a historic moment, the result of an incredible journey from initial design and intensive engineering to the buildup of one of the most advanced manufacturing facilities in the world, in record time.”

CEER was created as a joint venture between the Public Investment Fund and Foxconn. It is the only company in Saudi Arabia to design, engineer, source, validate, manufacture, and soon sell and service a portfolio of aspirational vehicles.

CEER is positioned to be a key enabler of Saudi Arabia's industrial transformation (Asharq Al-Awsat)

Since its inception in 2022, CEER has been focused on building a diverse mix of Saudi talent and global experts that had grown from 20 employees to 2,300; securing key partnerships with renowned international partners including BMW, Hyundai Transys, Rimac, Siemens, Sabelt, Isoclima, ANDRITZ Schuler, Dürr, XYG, Lear, Benteler, Fangxin, Shin Young, JVIS, as well as leading local companies including Zamil Group, Abdul Latiff Jameel Group and APICO (Balubaid Group) that are driving the target of reaching 45% local content by 2034; building one of the most advanced manufacturing complexes in the world; and designing, engineering and testing vehicles that are tailor-made to the specific requirements of Saudi Arabia and the region.

CEER is positioned to be a key enabler of Saudi Arabia's industrial transformation, creating lasting economic impact and supporting the Kingdom's diversification ambitions under Vision 2030.

CEER is projected to contribute $8 billion (around SAR30 billion) to Saudi Arabia’s GDP, $21 billion (around SAR80 billion) to trade balance improvement, and create approximately 30,000 direct and indirect jobs, with 80% of direct jobs held by Saudis. CEER supports the Saudi Green Initiative target of Net-Zero emissions in Saudi Arabia by 2060.