Ssangyong Motor said Monday it signed a licensing contract for auto parts with a Saudi firm that would allow it to locally manufacture vehicles in Saudi Arabia from 2020.

With the agreement signed Saturday in Seoul, Ssangyong would provide technological assistance to Saudi National Automobile Manufacturing Co.  in building an auto production factory, localizing car parts and training technicians, the company said.

Ssangyong Motor is a local unit of Indian carmaker Mahindra & Mahindra Ltd. SNAM, an affiliate of Safari Group, has obtained a 1 million square meter lot in Jubail, an industrial city in Saudi Arabia, to host an auto manufacturing plant and another lot of same size for car parts suppliers. SNAM is the first auto firm established as part of Saudi Arabia's long-term national development plan that includes fostering the car industry.

If everything proceeds as planned, Ssangyong's premium pickup trucks will be assembled at the Saudi factory from 2020.  The goal is to be able to manufacture 25,000 vehicles annually through gradual production increases.

Ssangyong said its components suppliers will also be able to advance into Saudi Arabia through an auto parts cluster established within the Jubail complex. (Yonhap)