Isuzu Motors has announced it is setting up a truck assembly plant in Saudi Arabia, its first plant in the Middle East.

In a deal with the KSA government, Isuzu will establish a business entity in the Kingdom with the plant being built in the Industrial City of Dammam II. The company plans to start manufacturing its F-series medium-sized trucks by the end of 2012.

Future plans include expanding the site, located in an industrial park in the eastern part of the country, to handle local assembly of light-duty Elf trucks produced at the company's plant in Fujisawa, Kanagawa Prefecture as well as heavy duty models.

The company said that it will eventually expand production from 600 to around 25,000 units per year.

Ashok Leyland the Indian truck manufacturer inaugurated their state-of-the-art vehicle factory of Ashok Leyland (UAE) Ltd, a joint venture between Ashok Leyland, the flagship of the Hinduja Group (India) and the Ras Al Khaimah Investment Authority (RAKIA), at Ras Al Khaimah in 2010.

The facility, which is the UAE’s first vehicle factory, also launched the AVIA range of trucks manufactured by Avia Ashok Leyland, Czech Republi. Ashok Leyland has enjoyed a dominant position in the popular bus market of the Gulf region and therefore it was only natural to set up a manufacturing base closer to our customers.

The region also has a number of truck body and vehicle body customization companies with Mammut and Gorica industries as the leaders.

Positives for the Steel Sector:
For suppliers to the steel fabrication industry these new developments signify:

• An additional market for conventional machinery, tools & consumables
• A new market for specialized machinery, tools & consumables specifically used in Vehicle Industry.
• An emphasis on quality and brands of repute, as used by the vehicle industry worldwide
• A preference for particular brands a result of brand loyalty of the previous manufacturing base of shifting/expanding manufacturers.
• A new market for metal-cutting machine tools as a manufacturing sector requirement.

It is important to note that vehicle building in the Middle East will remain a fabrication, assembly & fit-out operation in the short term. However, the medium to long-term holds great promise for auto-part manufacture & ancillary industries to move in as well. The GCC offers stability, reach to Asia, Africa and European markets, and above all a tax-free environment.