The U.S.-Israel war with Iran is sending shockwaves through the global auto industry, and the biggest names in the business are feeling the pressure. According to a recent Bernstein analysis, Toyota, Hyundai, and Chinese automakers like Chery stand to lose the most among foreign car brands operating in the Middle East. With shipping lanes choked, oil prices surging, and regional sales grinding to a halt, the conflict is already reshaping how automakers think about risk, supply chains, and where they sell their vehicles.
- Toyota, Hyundai, and Chery together account for roughly one-third of vehicle sales in the Middle East, making them the most exposed foreign automakers.
- The near-closure of the Strait of Hormuz has added 10 to 14 days to transit times and stranded vehicle shipments headed for the region.
- Oil prices have surged past $100 a barrel, driving up gas prices for U.S. consumers and squeezing automakers that rely on gas-powered lineups.
Who Has the Most to Lose in the Middle East
Bernstein’s analysis identifies Toyota, Hyundai, and Chery as the non-domestic automakers facing the most potential impact from the Iran conflict. Together, they account for roughly a third of sales in the Middle East, with Toyota leading at 17%, Hyundai at 10%, and Chery at 5%. To put that into perspective, over 600,000 vehicles were sold across the Middle East last year. Based on those market shares, Toyota would account for roughly 204,000 vehicles, Hyundai around 120,000, and Chery about 60,000 units.
Inside Iran specifically, domestic automakers Iran Khodro and SAIPA lead the market, followed by Chery with a 6% market share. Chinese players including Chery, JAC, and Changan are the main international presence in Iran, filling a vacuum left by established global brands that exited under sanctions.
Toyota confirmed it does not operate in Iran but is monitoring the situation to prioritize employee safety in the Middle East. Hyundai and Chery did not immediately respond to requests for comment.
Chinese Auto Exports Take a Hit
Other Chinese carmakers are also expected to be affected, as the Middle East has become a growing destination for Chinese auto exports. Bernstein, citing China export data, said the region accounted for about 17% of China’s passenger vehicle exports in 2025. That’s a massive chunk of business now sitting in limbo.
Chery derives 12% of its global sales from the Middle East, followed by SAIC Motor at 11% and Great Wall Motor at 6%. The conflict adds another layer of pressure for Chinese automakers already dealing with a domestic slowdown. BYD’s global sales fell 41% year over year in February, the sixth consecutive monthly decline. With both the home market cooling and a major export region disrupted, Chinese brands are caught between two difficult realities.
The Strait of Hormuz and the Wider Fallout
The Bernstein report notes that while sales in the region will be affected, the closing of the Strait of Hormuz, which links the Persian Gulf to the Gulf of Oman and the Indian Ocean, and rising oil prices will send shockwaves across the global automotive industry. The strait carries around 20 million barrels of oil daily and serves as a major route for vehicle and parts shipments.
Oil prices have surged past $100 per barrel, the first time crude has crossed that mark since Russia’s 2022 invasion of Ukraine. Brent crude neared $120 a barrel in early trade before settling around $104, while WTI, the U.S. benchmark, soared more than 11% to $101. Average U.S. regular gasoline prices have shot up from roughly $3 per gallon before the strikes to $3.45 per AAA tracking, and more increases loom.
Bernstein analyst Eunice Lee pointed out that Stellantis has already seen an 11% stock price slump since before the conflict began, calling its sharp pivot toward gas-guzzling HEMI V8 engines poorly timed. If you’re someone browsing used cars for sale right now, fuel efficiency is suddenly looking a lot more attractive with pump prices climbing this fast.
If history repeats itself, consumers may begin shifting toward more efficient vehicles, as they did back in the 1970s. Hybrid and plug-in hybrid models could see stronger demand, especially as manufacturers expand their electrified offerings. GM, Ford, and Stellantis could face trouble with their gas-heavy lineups, as they have before, if oil prices surge for an extended period.
Rising Costs and Fewer Options for Car Buyers
Morningstar analyst David Whiston told Automotive News that the struggle to ship oil and other automotive components out of the region could add to the industry’s growing affordability crisis, noting that it adds more inflation to making a vehicle, which is already battling tariff costs. Industry forecasters were already predicting lower U.S. vehicle sales in 2026 because of the end of the federal plug-in vehicle tax credit and widespread affordability pressures.
Wedbush analyst Dan Ives says the war would probably need to push past the three or four-month mark before Detroit automakers like Ford, GM, and Stellantis feel a major impact. But if oil prices stay elevated and supply chain disruptions continue, that timeline could shrink quickly. Some analysts have warned that oil could rise to $150 a barrel by the end of March if travel through the strait doesn’t resume.
The auto industry has been stumbling from one crisis to the next for half a decade. The chip shortage lasted two years. Red Sea disruptions from Houthi activity are still affecting shipping. And now, the Iran conflict threatens another prolonged hit. For buyers, dealers, and manufacturers alike, it’s shaping up to be a rough stretch all around.
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