Stock Markets March 5, 2026

Asia's Carmakers Face Shipping Disruption as Middle East Trade Routes Stall

China, India, South Korea and Japan rely on Gulf markets for billions in auto exports as Strait of Hormuz traffic pauses amid regional conflict

By Leila Farooq
Asia's Carmakers Face Shipping Disruption as Middle East Trade Routes Stall

The ongoing U.S.-Israel conflict with Iran, now in its seventh day, has forced shipping along the Strait of Hormuz to slow or stop, raising immediate risks for Asian automakers that send substantial volumes and value of vehicles to the Middle East. Manufacturers from China, India, South Korea and Japan ship billions of dollars' worth of cars to Gulf markets; interruption of the route threatens near-term deliveries and production plans tied to that region.

Key Points

  • Middle East is a major overseas market for Asian automakers; shipping through the Strait of Hormuz has largely halted amid fears of attacks by Tehran, threatening deliveries.
  • China exported 1.39 million of 8.32 million overseas-shipped cars in 2025 to Gulf countries; key exporters include Chery, BYD, SAIC, Changan and Geely and China JVs of Kia, Hyundai and Toyota.
  • India, South Korea and Japan also have significant exposure - India exported $8.8 billion in cars in 2025 with 25% going to the Middle East; South Korea exported $72 billion in cars with $5.3 billion to the Middle East; Toyota shipped over 320,000 cars from Japan to the Middle East in 2025.

The U.S.-Israel war with Iran entered its seventh day on Friday and has already had a tangible effect on maritime traffic to the Middle East, a destination that accounts for large volumes and significant value in Asian auto exports. Shipping activity through the Strait of Hormuz has largely halted amid concerns over attacks by Tehran, creating a potential disruption for automakers that move vehicles along that corridor.

China is particularly exposed because the Middle East ranks as the second-largest foreign market for vehicles made there. Facing weaker domestic demand, Chinese manufacturers have leaned on overseas sales, including to Gulf states. In 2025 Chinese automakers shipped 8.32 million cars abroad, and 1.39 million of those vehicles - roughly one-sixth - were destined for Gulf countries such as Saudi Arabia and the United Arab Emirates, according to the China Passenger Car Association.

Major Chinese exporters named in industry data include Chery Automobile, BYD, SAIC Motor, Changan Automobile and Geely. In addition, China-based joint ventures of global brands - including Kia, Hyundai Motor and Toyota Motor - feature among the top 10 exporters to the Middle East, data from a leading Chinese supply-chain platform indicate.

India's auto export picture is similarly tied to Gulf demand. In 2025 India shipped $8.8 billion worth of cars overseas, and about 25% of that total went to the Middle East, with Saudi Arabia a principal destination. Hyundai Motor's operations in India show significant exposure: half of its 2025 global shipments from India, valued at $1.8 billion, went to Gulf countries. Toyota's exports from India were also concentrated on the Middle East - roughly two-thirds, or more than $300 million, of the $470 million India exports it recorded last year were bound for that region.

Maruti Suzuki had a smaller share of its India exports directed to the Gulf. Less than 15% of Maruti Suzuki's export value went to those markets; of its $3.2 billion in total exports in 2025, cars worth $457 million were shipped to the Gulf. Nissan's exposure from India was estimated at $318 million in 2025, representing 38% of its total exports from that country.

South Korea also recorded substantial shipments to the Middle East. The country's total car exports by value reached a record $72 billion in 2025, with $5.3 billion of that value sent to the Middle East - an increase of 2.8% from 2024, according to trade association data. Hyundai Motor reported that exports to the Middle East and Africa represented 8% of its total wholesale sales in 2025, which amounted to 4.14 million units. That share corresponds to approximately 317,000 cars sent to the combined region. Kia's pattern was similar: 8% of its 2025 wholesale sales of 3.1 million units were shipped to the Middle East and Africa.

From Japan, Toyota exported 320,699 vehicles from its home market to the Middle East in 2025, a 5.4% rise year-on-year. Those shipments comprised just over 15% of Toyota's total exports from Japan, which exceeded 2 million units in the same period. Separately, production plans tied to Middle East demand have been adjusted because of logistics concerns. One report cited that Toyota will produce nearly 40,000 fewer vehicles destined for Middle East markets as a consequence of the logistical fallout from the U.S.-Israeli campaign against Iran.

With the Strait of Hormuz a critical chokepoint for many of these trade flows, any sustained pause or escalation that affects vessel movements could have immediate implications for delivery schedules, inventories at destination markets and production planning at exporting plants. For manufacturers that route a material share of output through the Strait, short-term congestion or rerouting could ripple through supply chains and commercial calendars tied to Gulf customers.

Industry exposure varies by company and by country of production, but the aggregate figures underline the financial and operational stakes: billions of dollars of vehicles flowed from Asian factories to Gulf ports in 2025, and interruption of that highway of trade is already being felt in shipping patterns and in manufacturer responses to logistical risk.


Note: The data cited in this report reflect export values, shipment volumes and company disclosures for 2025 as referenced above.

Risks

  • Disruption to Strait of Hormuz shipping could delay deliveries and force manufacturers to alter production plans - affects auto manufacturing and maritime logistics sectors.
  • Concentration of exports to Gulf markets raises near-term revenue and inventory risks for companies dependent on those destinations - impacts automakers' sales and export-dependent supplier chains.
  • Logistical constraints tied to the conflict have prompted production adjustments, such as Toyota's reduction of nearly 40,000 Middle East-bound vehicles - a risk to production scheduling and regional market supply.

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