War with Iran raises risks for global auto industry
One of the main pressure factors was oil prices. Increased tensions between Iran and its adversaries caused a sharp rise in the quotations of raw materials, writes Carscoops. Of particular concern is the situation around the Strait of Hormuz – a strategic route through which a significant part of the world’s oil supplies passes. Any threat to stability in this region instantly affects the cost of fuel. For the automotive industry, this means increased costs at virtually every stage – from the operation of production lines to the transportation of parts and finished vehicles around the world.
Additional risks are related to logistics. Shipping in the Persian Gulf is already facing delays, rising insurance rates and increased security measures. For many Asian manufacturers, this is a serious problem, as a significant portion of their exports to the Middle East go through these routes. Companies from Japan, South Korea, China and India are actively supplying cars to the markets of Saudi Arabia, the UAE and other states in the region, and even short-term disruptions can lead to delays in deliveries and increased transportation costs.
One of the first signals of possible consequences was Toyota’s decision to reduce production of cars intended for the Middle East market. According to according to Reuters, we are talking about tens of thousands of cars whose production will be reduced in the coming months. When such a large automaker adjusts its production plans, it immediately affects the entire supply chain – from component manufacturers to logistics companies.
Smaller suppliers of automotive components, who operate with minimal margins and depend on precise order planning, are particularly vulnerable. Any fluctuations in export volumes can lead to an imbalance – one period warehouses are full of parts, and the next there is a need to urgently increase production.
Customers can also feel the economic consequences. Rising transportation costs and fuel prices gradually increase the cost of cars. In an environment of high inflation and expensive credit, even a small increase in car prices can reduce demand, as many consumers may postpone purchases until more stable times.
