Analysis

Locally produced Volvo Trucks to be a driving force in Saudi Arabia

Facility at King Abdullah Economic City has begun production of Volvo trucks

PHOTO: The new facility was designed by a Volvo/Renault Trucks project team of engineers and process owners. Credit: Supplied

As international OEMs look to capitalise on the lucrative GCC and Middle East markets, the need for strategically located manufacturing facilities in the region becomes critical.

Last month, Saudi Arabia’s $100 billion King Abdullah Economic City (KAEC) saw the first truck of any kind manufactured in its Industrial Valley. Arabian Vehicles & Trucks Industry Ltd (AVI), a joint venture between Volvo Trucks and Zahid Tractor & Heavy Machinery, began production at a new facility in KAEC, resulting in the first Volvo truck rolling off the new AVI assembly line in June.

AVI’s facility was designed by a Volvo/Renault Trucks project team of engineers and process owners from both brands. The new plant will be one of the first in the world to assemble both Volvo and Renault trucks on the same line.

“The new AVI facility represents a significant breakthrough in the diversification of Saudi Arabia’s industrial capabilities,” says Wafaa Zawawi, chairman of the board of managers of AVI. Zahid Group will also work on developing local talent through the production plant by providing employment and training opportunities for Saudi youth, he adds.

The facility was relocated from Jeddah to KAEC, Zawawi notes, due to its business-friendly environment and fast-track employment opportunities. “With a current Saudisation rate in excess of 30%, further employment opportunities for Saudi nationals will arise as the plant increases production to meet local demand.”

Fahd Al-Rasheed, managing director and group CEO of KAEC, says the start of production at the assembly plant is in line with the City’s role as a key driver in the Kingdom’s diversification into non-oil sectors. “We are happy to see the first Volvo truck roll out from the assembly line, and share AVI’s pride that Saudi nationals are an integral part of this great achievement.”

Meanwhile, Anders Olausson, vice president of Volvo Global Manufacturing and AVI board member, points out that KAEC’s location on the Red Sea provides a strategic advantage for AVI, helping serve local and regional markets with greater efficiency.

The principles followed in designing the production processes and general layout of the new plant were derived from the Volvo Production System. The new facility is fully air-conditioned and ergonomically designed, AVI said in a statement.

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