War in Iran disrupts $19 billion used car trade in Asia

Thursday 26 March 2026 - 12:20

By: Dakir Madiha

War in Iran disrupts $19 billion used car trade in Asia

US and Israeli military strikes on Iran since February 28 have thrown Asia's $19 billion used car export industry into disarray. Ships avoid the Middle East, stranding cargoes at sea and overwhelming ports from Sri Lanka to China.

Dealers feel the impact acutely. Umar Ali Hyder Ali runs Yokohama-based Kobe Motor, which ships about 18,000 vehicles yearly to South Asia, the Middle East, and Africa. Days after the conflict started, one shipment of over 500 cars idled at sea. The vessel could not dock in Sri Lanka due to port congestion from rerouted Dubai goods, Reuters reports. The cars finally unloaded at Hambantota port more than 10 days late. Around 50 luxury used vehicles, including Rolls-Royce, Lamborghini, and Ferrari models, remain stuck in Sri Lanka and China. Ships failed to reach Dubai, where buyers awaited.

The Strait of Hormuz lies at the crisis's core. Maritime traffic through this narrow passage between Iran and Oman has dropped about 95 percent since the conflict began, according to BBC Verify data. Iran's Islamic Revolutionary Guard Corps has threatened to target any ship attempting passage, effectively barring most commercial vessels.

The closure cuts access to Dubai Auto Zone, the world's largest used car market, Nikkei Asia reports. Some 400 dealers there collect vehicles from Japan and South Korea for re-export to Africa, Central Asia, and neighboring Middle Eastern countries. The United Arab Emirates took 224,000 Japanese used cars last year, or about 15 percent of total exports, per Japan's Finance Ministry data cited by Reuters.

Japan and South Korea exported $19 billion in used vehicles last year. The conflict hits both hard. In South Korea, over a third of 883,000 exported used cars went to the Middle East. The peak season now faces shipment halts. At an Incheon port vehicle storage complex, more than 70 percent of cars sit idle, says Kang Tae-yang of a shipping firm. Some vessels at sea have paused or diverted from original routes.

Port congestion has sparked panic among Japanese shipping lines, Hyder Ali says. Some cancel shipments; others reroute to Pakistan or China ports, with one firm demanding a $5,000 deposit per car.

Diplomatic glimmers appear. Iran's Foreign Minister Abbas Araghchi told Kyodo News last week that Japanese ships might pass the strait. Tehran applies selective access to non-adversary nations. Used car exporters say uncertainty hurts most. "Whenever war breaks out, we can only wait and see," South Korean dealer president Jin Jae-woong told Reuters.