Skyworth Auto, the car arm of the huge Chinese home appliance company Skyworth, has signed a collaboration agreement with a Saudi company as more Saudi money floods into the Chinese auto industry.

The Saudi royal-controlled KAG Group and Skyworth Auto have inked a 10-year strategic cooperation agreement with a business plan of RMB 10 billion yuan ($1.38 billion) for the first five years of the relationship. The announcement was made by the company officials. The first part of the five-year cooperation, Skyworth Auto, will govern how the second phase is carried out. On May 7-8, the management of KAG came to Xuzhou, in the province of Jiangsu, to discuss a strategic partnership and sign a deal with Skyworth Auto.

According to the sources, KAG’s primary business activities include the transportation of Saudi royal automobiles, new energy vehicles (NEVs), data analysis and consulting in Saudi Arabia, as well as more than 85% of Saudi towns’ subterranean water pipes.

According to company officials, the two have also agreed to work together on projects involving passenger cars and supercharging stations. KAG will also be Skyworth Auto’s only partner in Saudi Arabia. The Middle East is one of the primary target locations for the construction of KD (knocked down) plants, which Skyworth Auto is establishing in order to grow its international markets. New agreements will be negotiated progressively and Skyworth will collaborate with KAG on the development of its upcoming KD facility in Saudi Arabia.

Established in June 2000, Skyworth is a prominent household appliance giant in China. In April 2021, Skyworth made its official debut in the automotive sector when its founder, Huang Hongsheng, announced that the business he founded would now be referred to as Skyworth Auto.