KG Mobility to supply automotive parts to Saudi SNAM

South Korea's KG Mobility Corp., formerly Ssangyong Motor Co., announced on Monday it signed a memorandum of understanding (MOU) for building a parts supply network with The Saudi National Automotive Manufacturing Co. (SNAM). 

KG Mobility Corp's executives are visiting the Middle Eastern country as a member of the business delegation accompanying South Korean President Yoon Suk Yeol during his state visit to Saudi Arabia.

Through this agreement, KG Mobility's domestic parts suppliers will enter the Saudi market with a commitment to provide high-quality parts and establish a system for quality assurance. SNAM also plans to create a local assembly production system by setting up a parts cluster within the Jubail Industrial City in the future.

KG Mobility had previously signed product license agreements in 2019 and 2020 for a knock-down kit cooperation project with SNAM, and last year, it signed a knock-down parts supply agreement.

The production scale is set at a total of 169,000 units, including 90,000 units of Rexton Sports Khan and 79,000 units of Rexton New Arena over seven years from the start of production.

SNAM also secured a plot of approximately 1 million square meters in the Jubail Industrial City last year and held a groundbreaking ceremony for the construction of Saudi Arabia's first automobile plant. The Saudi company plans to start partial production this year and increase annual production to around 30,000 units through the construction of the plant.

Write to Sungsu Bae at baebae@hankyung.com