How the Conflict Affects Car Prices
The auto industry is vulnerable through several channels:
- Shipping disruptions: Many vehicles and auto parts are shipped from Asia through or near the Strait of Hormuz. Rerouted ships mean delays and higher costs.
- Higher transportation costs: Oil above $110/barrel increases the cost of shipping vehicles domestically and internationally
- Parts supply chain: Critical components from Asian manufacturers (semiconductors, electronics, steel) face delays
- Steel and aluminum prices: Energy-intensive to produce, so higher energy costs push raw material prices up
Which Vehicles Are Most Affected
Most vulnerable:
- Imported vehicles from Japan (Toyota, Honda, Subaru, Mazda)
- Korean vehicles (Hyundai, Kia)
- European luxury vehicles that source Asian components
- Electric vehicles (rely heavily on Asian battery supply chains)
Less affected:
- Domestically manufactured vehicles (US, EU models built locally)
- Used cars already on dealer lots
Should You Buy a Car Now?
- If you need a car soon: Buying now from existing dealer inventory is likely better than waiting, as prices may rise over the coming months
- If you can wait: Monitor the situation — a quick resolution to the conflict would ease supply chain pressures
- Used cars may become more attractive if new car supply tightens
- Leasing may lock in current pricing before potential increases
Global Impact
Europe: Many European automakers source parts from Asia. Production slowdowns are possible.
Australia and New Zealand: Heavily dependent on imported vehicles. Prices and delivery times likely to increase.
UK: Japanese and Korean imports make up a large market share. Used car prices may rise if new supply is constrained.
Sources: Reuters automotive analysis, FreightWaves shipping data