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PIF firm prepares Pirelli tyre plant contract award

23 June 2025

 

Saudi Arabia’s Mena Tyre Company is preparing to award a contract to build a Pirelli tyre manufacturing plant in King Abdullah Economic City (KAEC).

MEED understands that the contract is being finalised and is expected to be signed within the next few weeks.

The tender notice was issued in December last year, and firms submitted their final offers in April.

Mena Tyre Company is a joint venture of Saudi sovereign wealth vehicle the Public Investment Fund (PIF) and Italian tyre maker Pirelli Tyre. The PIF holds a 75% stake in the venture, with Pirelli holding the remaining 25%.

The plant is expected to start production in 2026. It will make tyres for passenger vehicles under the Pirelli brand. It will also manufacture and market tyres under a new local brand targeting the domestic and regional markets.

The plant is expected to have the capacity to produce 3.5 million tyres a year.

In March, MEED exclusively reported that the PIF and Pirelli Tyre had tendered the contract to build an estimated $550m tyre manufacturing plant in KAEC.

UK-based firm Jones Lang LaSalle is the project consultant.

The project is located within the King Salman Automotive Cluster of KAEC, which was officially announced on 6 February by Saudi Arabia’s Crown Prince Mohammed Bin Salman Al-Saud. 

The move was part of the kingdom’s push to become a dominant player in the Gulf’s automotive sector. It follows investment in recent years in infrastructure, supply chain development and research to attract global automakers to Saudi Arabia and create an ecosystem for electric vehicle (EV) production in particular – all driven by the Saudi Vision 2030 mandate to diversify the economy.

The cluster is expected to be a major contributor to the National Industrial Development and Logistics Programme (NIDLP), which aims to develop high-growth sectors locally and attract foreign investment.

Several schemes supporting the NIDLP have made significant progress in recent years, including multibillion-dollar EV manufacturing plants backed by the PIF, such as assembly facilities for US-based Lucid Motors and Ceer, the kingdom’s first homegrown EV brand, launched by the PIF in collaboration with Taiwan’s Foxconn.

These facilities are supported by the National Automotive & Mobility Investment Company (Tasaru Mobility Investments), which the PIF established in 2023 to develop the kingdom’s local supply chain capabilities for the automotive and mobility industries.

The PIF then signed several agreements with international companies, including South Korean car maker Hyundai and Pirelli, to establish production facilities in KAEC's automotive cluster.

READ THE JUNE 2025 MEED BUSINESS REVIEW – click here to view PDF

Gulf accelerates AI and data centre strategy; Baghdad keeps up project spending, but fiscal clouds gather; Banking stocks rise despite lower global oil prices

Distributed to senior decision-makers in the region and around the world, the June 2025 edition of MEED Business Review includes:

> GULF PROJECTS INDEX: Gulf projects index leaps 4.3%
To see previous issues of MEED Business Review, please click here
https://image.digitalinsightresearch.in/uploads/NewsArticle/14115309/main5503.jpg
Yasir Iqbal

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