Oman signs deal with China’s Spruce for car factory

Oman’s Khazaen Economic City has signed an agreement with Chinese company Spruce Group to set up a vehicle assembly and production centre.

Spruce Group will make an initial investment of OMR5 million ($12.9 million), increasing it to OMR20 million, to support the Gulf state’s Vision 2040 diversification strategy, Muscat Daily reported.

The facility is expected to have a production capacity of over 3,200 electric and hybrid vehicles per year, targeting exports to the Middle East and Africa. 

It will also produce spare parts and vehicle accessories, the state-run Oman News Agency reported.

The project is intended to enhance the sultanate’s industrial sector by including artificial intelligence and robotics in the production process, the report said.

No timeline was provided.

Khazaen Economic City is Oman’s largest economic development zone, covering 52 million square metres in Barka between Muscat and Sohar.

Last month the Public Authority for Special Economic Zones and Free Zones secured OMR200 million in investments to support economic diversification.

The projects will be developed in the Special Economic Zone at Duqm, Salalah Free Zone and Khazaen Economic City.

The sultanate’s total foreign direct investment rose to more than $81 billion by the end of 2025, about 8 percent higher than in 2024, with the UK maintaining its position as the largest external investor.

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