A Strategic Study of Assembly Plant Establishment in the Kingdom of Saudi Arabia

University essay from Linköpings universitet/Ekonomiska institutionen


Preface: Traditionally, assembly plant establishment in foreign countries has been a way for corporations to avoid high import duties and/or gain access to free-trade zones. With World Trade Organization (WTO) membership rising, and consequently import duties falling, the role of the assembly plant is changing. Purpose Statement: This thesis concentrates on companies that contemplate on, or have ambitions of establishing industrial assembly facilities in the country of Saudi Arabia. The main purpose is to present the disadvantages and advantages associated with assembly plant establishment, as well as to discuss and give recommendations regarding suitable assembly plant goals (long-term) in Saudi Arabia. Research Process: Background information from Scania CV AB and literary sources have provided the foundation for this research’s empirical results, which have been based on interviews, observations and articles obtained in Saudi Arabia, as well as from Scania, Arabic news sources and the Internet. Results: For corporations that can lower their overall costs in Saudi Arabia, the country offers basic assembly prerequisites. For corporations looking for long-term production, the potentiality is limited to a few major industrial areas - namely oil-, gas-, mineral-, plastics-, and chemical related industries.

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