The South Korean concern is investing $500 million in the project.

Abdullah Al Othman president of King Saud University says the first car, a five-passenger model, is expected to roll out within two years. The kingdom plans to export it to the Gulf nations and north Africa.

He said in a statement on Sunday that the Wadi Al Riyadh Technology Firm, affiliated with the university, will have a 10 per cent share, while the South Korean company will put some 30 per cent. The rest will be offered to investors.

Earlier this month King Abdul Aziz City for Science and Technology also unveiled plans for launching a domestically designed and manufactured automobile.

Economy to grow 4.2% in 2011

Saudi Arabia’s economy is forecast to grow 4.2 per cent in 2011 after a 3.8 per cent expansion in 2010, driven by heavy government spending, the respected Jadwa Investment bank said on Sunday.

With buoyant crude prices and strong demand, the world’s largest supplier of oil will easily fund its budget and turn in a surplus, despite a planned seven per cent hike in spending from 2010’s original budget, the Riyadh investment bank said in a report.

And while both the state and private sectors will grow, state spending will remain the most powerful driver of the economy. —