The MENA region experienced a spurt in automotive sales last year with approximately 40 million cars registered, according to Statista. Compared to China which saw 24 million in car sales, this goes to show just how much potential there is in the MENA market.

The demand for automobiles is such that Jordan will be building a car manufacturing facility by pouring in $1.5 billion in the project. The news came from SIAG, an automotive company, saying that it signed a memorandum of understanding with the Aqaba Special Economic Zone Authority (ASEZA) to build a car plant that will produce close to 50,000 vehicles annually. The MoU earmarks a special estate in Aqaba for automobile manufacturing which includes the factory costing $477 million in the first phase. ASEZA Chief Commissioner Nasser Shraideh said that the investment volume will expand to $6 billion in the first five years.

The plant aims to contribute to the country’s GDP while simultaneously lowering the unemployment rate which peaked at 18 percent in the previous 18 months. the average growth of rate of unemployment year-on-year is three percent between 2015 and 2017. “The chief commissioner explained that the free trade agreement between Jordan and the U.S. contributed to attracting such a “mega-investment,” where 70% of its workforce will be local,” said Zawya while covering the ASEZA factory news. Currently, Jordan is the only Arab nation that has a free trade agreement in place with the U.S. and  Europe, enabling Jordanian-made vehicles to enter these markets.

W Motors will also move its production facility from Italy to UAE in 2020 to boost the local automotive production industry.

The Aqaba factory will initially roll out two types of vehicles: an SUV (operating on petrol and electric power) and light-duty pickup trucks (petrol as well as diesel). On the back of Jordan’s new manufacturing ambitions, the GCC is preparing to be a significant car exporter within the region. A major contributor to the manufacturing initiative is Saudi Arabia which intends to erect a car manufacturing city, providing “a slew of advantages and incentives for investors,” according to the Ministry of Energy, Industry and Mineral Resources.

Indeed, the kingdom of Saudi Arabia has a store of raw materials that will help in building the city, including resources like aluminium, rubber and plastics, liquefied aluminium, and more, as tweeted by the ministry recently. It is only a matter of time before investments start pouring in from around the world. For instance, Abdul Latif Jameel (ALJ) and Kosei Aluminium (Japan) have signed a MoU with the National Industrial Clusters Development Program (NICDP) aimed at securing foreign investment for the Saudi Arabian auto manufacturing industry. Plans for this venture in the longer term involve the establishment of a factory in Saudi Arabia as a global hub for Kosei, contributed to by the Saudi Arabian Mining Company (Ma’aden).