SEOUL, March 08 (AJP) -Asian automakers, led by Chinese brands but also including Japan’s Toyota Motor Corporation and South Korea’s Hyundai Motor Company, could face the biggest fallout if the war triggered by U.S. and Israeli strikes on Iran turns into a prolonged conflict, according to a report by Bernstein Research.
In a recent report, the brokerage said the conflict could hit the global automotive sector through three main channels: collapsing vehicle demand in Iran, disruptions to vehicle shipments across the Gulf region and rising oil prices that weaken global car sales.
The report warned that the risks are particularly concentrated in Asia, where automakers have built strong market positions in the Middle East and rely heavily on shipping routes passing through the Strait of Hormuz.
Chinese manufacturers are expected to suffer the most immediate impact due to their growing export reliance on the region.
According to Bernstein, about 17 percent of China’s passenger-car exports are shipped to the Middle East, with roughly 500,000 vehicles delivered to the region last year. Chinese brands have expanded aggressively in Iran in recent years after Western automakers withdrew under sanctions, with companies such as Chery, Changan and others filling much of the market previously occupied by European and Japanese firms.
The brokerage said the Middle East has become a crucial outlet for China’s export-driven auto industry, leaving it vulnerable to geopolitical disruptions.
The report also highlighted Iran as the region’s largest automotive market. Total vehicle sales across the Middle East reached roughly 3 million units last year, with Iran accounting for about 38 percent of that total.
A collapse in Iranian demand would therefore ripple across the wider regional auto market, Bernstein said.
While Chinese manufacturers face the largest direct exposure, the report said established Asian automakers also have significant stakes in the region.
As of early March, market share across the Middle East stood at roughly 17 percent for Toyota, 10 percent for Hyundai Motor, and 5 percent for China’s Chery, together representing nearly a third of regional vehicle sales.
The Middle East has also become an important export destination for Korean automakers. Hyundai Motor sends roughly 8 percent of its global wholesale shipments — about 317,000 vehicles annually — to the Middle East and Africa, highlighting how geopolitical shocks in the Gulf could ripple through Asian auto supply chains.
Bernstein said the most serious long-term risk lies in the potential impact of higher oil prices on global vehicle demand. If the conflict pushes crude prices higher — particularly if shipping traffic through the Strait of Hormuz is disrupted — consumers worldwide may delay car purchases, especially internal-combustion models that still dominate most markets.
“The biggest risk for the auto sector is that a prolonged war drives oil prices higher and undermines global economic confidence,” the report said, warning that such a scenario could weaken vehicle demand well beyond the Gulf region.
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