The Impact of Iran-Centered Geopolitical Tension on Automotive-2

Hello, we are coming to the end of March 2026. It has been almost four weeks since US and Israeli forces attacked Iran. Although Trump attempted to reduce tensions with new statements as our article was being prepared, this escalating Iran-centered tension in the Middle East continues to confront the global automotive industry with one of the most complex tests of recent years. The sector, which is trying to recover after the pandemic, is now in the grip of an energy shock originating from the ‘Strait of Hormuz’.

Let’s briefly look at the main effects of Iran tension on the automotive industry as of today: 1. Logistics Risk Originating from the Strait of Hormuz: The passage problem in the Strait of Hormuz, one of the most critical waterways in the world, has brought automotive logistics to the point of ‘force majeure’. Especially for Asian manufacturers (China, Japan, South Korea and India), the Middle East is a huge market, covering approximately -25% of total exports.

The fact that the ships changed their routes to the south of Africa, that is, towards the Cape of Good Hope, extended the delivery times by 10 to 14 days and also increased the freight costs. 2. A New Hidden Crisis in Production: Helium, Aluminum and Petrochemicals Market analysts draw attention to the supply of raw materials on the production line rather than energy prices. Chief among these, of course, is Chip Risk.

Because shipping problems in and around Qatar, which supplies one-third of the world’s helium supply, have begun to threaten semiconductor chip production. This situation brings to mind the concern that a chip crisis similar to the 2021-2022 chip crisis is at the door. On the other hand, the decisions of petrochemical plants producing aluminum and plastic raw materials in the region to stop shipments directly increase the production cost per car by -20.

3. Tendency towards Renewable Energy in Consumer Behavior Fluctuations in oil prices instantly affect customers’ purchasing preferences. Due to increasing fuel prices, we started to observe a significant increase in the demand for battery electric vehicles (BEV) and hybrid motor vehicles in global markets in the first half of this month. On the other hand, geopolitical uncertainty and increasing vehicle prices cause customers to suspend their purchasing decisions.

4. Regional Brands and Turkey’s Position Those most affected by the crisis were the rapidly growing Chinese automobile giants in the Middle East market. European brands, on the other hand, feel more pressure on energy costs and parts supply. For Türkiye, the situation is twofold: On the one hand, increasing foreign exchange and cost pressure increases prices, on the other hand, proximity to Europe may pose a serious risk to our logistics advantage in the industry; As it is known, our automotive industry is dependent on the Middle East and Asia line for intermediate goods and spare parts.

If the tension spreads to energy facilities after Hormuz, ‘short-term production shutdowns’ may occur in our domestic automotive factories concentrated in the Marmara region due to parts supply. If we briefly summarize the current situation of our domestic automotive industry under all these conditions; It is clear that our country is ‘double-directed’ affected by this crisis, as it is both the production base of Europe and located on the Middle East logistics line.

For example, there has been an upward momentum in sticker prices at dealers since the beginning of this month. Among the main reasons for this, the freight increase stands out as the first reason. The logistics costs of vehicles and spare parts coming from the Far East, especially those originating from China, Japan and Korea, have started to bring additional costs between $800 and $1,500 per vehicle due to the route change.

This situation was reflected in the lists as an “interim price increase” of around 3-5% even for entry segment vehicles. On the other hand, as the search for a safe haven triggered by regional tension increased the volatility in exchange rates, automotive brands began to switch to a weekly price update period. Another issue arises as the availability problem. The stock abundance experienced in the last two years began to give way to uncertainty again as of March 2026.

For example, we see delays of 15 to 20 days in shipments between Turkey’s southern ports and the Marmara line due to disruptions in Suez and Hormuz. This causes some distributors to be more cautious in putting their vehicles on the market in order to see where their costs will evolve. Therefore, it reduces immediate delivery options for best-selling models. Finally, supply concerns and the expected large wave of price hikes in new-km vehicles have started to direct customers to second-hand markets.

Second-hand vehicle prices gained an average of 4-6% in March, buying into the expectation of a price hike in new-km vehicles. Therefore, the perception that the vehicle is an investment began to strengthen again with the news of tension. Let’s see if today’s Trump move will be enough to return the markets to normal.