Hyundai and Kia are rapidly gaining ground in Saudi Arabia, positioning themselves as strong contenders to surpass Toyota as the nation’s best-selling automotive group. Their aggressive strategy, which combines strong sales performance with major local investments, is reshaping the Kingdom’s automotive market and could lead to a historic upset within the next year.
Key Takeaways
- Hyundai and Kia now hold 23% of Saudi Arabia’s car market, close behind Toyota’s 28%.
- Hyundai Accent and Kia Pegas are leading the charge as best-sellers.
- Chinese carmakers also claim a growing 12% share of the Kingdom’s market.
- Hyundai has begun building a new factory in Saudi Arabia, backed by the Public Investment Fund.
- The facility, set to open in late 2026, will produce both EVs and combustion models.
Hyundai and Kia’s Rapid Market Growth
Through the first half of 2025, Hyundai and Kia accounted for nearly a quarter of all new vehicle sales in Saudi Arabia. Out of 412,920 cars sold between January and June, the two Korean brands captured a combined 23%. Toyota, long considered the dominant force in the region, maintained a 28% share, but its lead has narrowed considerably.
Hyundai’s compact Accent sedan has been the star performer, with 19,080 units delivered in just six months. For Kia, the Pegas sedan has been equally impactful, securing 15,530 sales. These strong results demonstrate how both brands are connecting with Saudi consumers through affordability, practicality, and increasingly modern designs.
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The Rise of Chinese Carmakers
Hyundai and Kia are not the only challengers shaking up the Saudi market. Chinese brands, which were once considered fringe players, have now amassed a 12% market share. Their competitive pricing, combined with expanding local dealer networks, has positioned them as serious rivals to both Japanese and Korean manufacturers.
This influx of new players is accelerating competition and forcing established brands to invest more aggressively in Saudi Arabia.
Local Investments Strengthening Hyundai’s Position
One of the most decisive moves by Hyundai Motor Group is its commitment to local production. In partnership with Saudi Arabia’s Public Investment Fund (PIF), Hyundai Motor Manufacturing Middle East has begun development on a large-scale factory within the Kingdom.
The PIF will own 70% of the venture, while Hyundai controls the remaining 30%. When operational in the fourth quarter of 2026, the facility will have the capacity to produce 50,000 vehicles annually, including both electric vehicles and internal combustion models.
Although Hyundai has not yet disclosed which specific models will be manufactured, the project represents a clear signal of long-term commitment to the Saudi market. It also raises the possibility that Kia and Genesis vehicles could eventually be produced locally as well.
Strategic Context: Saudi Arabia’s Automotive Ambitions
Saudi Arabia is becoming one of the most important automotive hubs in the Middle East. Its majority stake in Lucid Motors has already resulted in a local EV factory capable of producing up to 150,000 vehicles annually. With Hyundai’s new facility now underway, the Kingdom is laying the foundation to become a major player in both combustion and electric vehicle production.
This aligns with Saudi Arabia’s broader Vision 2030 strategy, which seeks to diversify its economy and reduce reliance on oil revenues. By attracting global automakers, the country strengthens its position not only as a consumer market but also as a manufacturing powerhouse.
Technical Snapshot of Hyundai and Kia in Saudi Arabia
| Category | Details |
|---|---|
| Market Share (H1 2025) | Hyundai & Kia: 23% / Toyota: 28% |
| Best-Selling Hyundai Model | Hyundai Accent – 19,080 units |
| Best-Selling Kia Model | Kia Pegas – 15,530 units |
| Competitor Growth | Chinese brands – 12% share of total sales |
| New Factory Capacity | 50,000 vehicles annually (launch Q4 2026) |
| Ownership Structure | 70% Public Investment Fund, 30% Hyundai Motor Group |
| Production Scope | Electric and internal combustion vehicles |
Looking Ahead
With sales momentum on their side and a significant local manufacturing presence on the horizon, Hyundai and Kia are poised to challenge Toyota’s dominance in Saudi Arabia. Their ability to align with Saudi Arabia’s industrial strategy, while offering popular and affordable models, makes their rise even more significant.
If trends continue, Toyota may soon find itself dethroned in a market it has long controlled, marking a turning point in the region’s automotive hierarchy.
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