by Impact of the War in Iran on the Global Automotive Market
The duration of the war in Iran will have serious consequences for the global economy, particularly for the automotive industry. While rising oil prices attract the main attention, the conflict will also cause a significant drop in global new car sales this year.
Experts highlight several key points:
Logistics Disruption and Consequences
Many shipping companies already consider the Strait of Hormuz a no-go zone, although it is not officially closed. This is causing a series of disruptions in supply chains. If this situation with the strait persists until April, followed by a slow reopening, it could lead to 800,000 – 900,000 fewer new cars being sold this year.
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Under such conditions, approximately 200,000 of the lost vehicle units may fall on the countries of the Gulf Cooperation Council, which includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE. All of them have already experienced significant disruptions in the supply of new vehicles. This will provoke extended waiting times and rising car prices, as well as a sharp increase in freight, insurance, and logistics costs.
Long-Term Consequences for Production and Sales
S&P Global Mobility forecasts that if the Strait of Hormuz begins to open after April, normal shipping volumes are unlikely to recover until the second half of 2026. Therefore, not only this year’s sales are at risk – in 2027, 500,000 fewer cars could be sold due to the conflict.
The overall vehicle production volume may also be affected. Analysts note that the Asia-Pacific region has been heavily impacted by oil supply disruptions and price increases, so car production in Japan, Korea, and China may slow down.
Importantly, these consequences are likely only if the war ends in the coming weeks, allowing normal functioning through the Strait of Hormuz to resume. If this does not happen or the conflict drags on for months or even years, as has been the case with other regional conflicts, the consequences will be even worse.
The situation in the region is a reminder of how globalized the modern automotive industry is, where a disruption in one part of the world instantly impacts production, logistics, and demand on other continents. Delays and rising costs create a domino effect felt by both manufacturers and consumers. The market prospects for the coming years will directly depend not only on political decisions but also on the ability of companies to adapt to new, more complex logistics routes and economic uncertainty.
