The ongoing war with Iran is causing major delays in Asia’s used-car trade, leaving luxury cars and thousands of vehicles stuck in ports, Reuters reports. Lamborghinis and other high-end cars remain stranded in Sri Lanka as global shipping routes are affected.
Umar Ali Hyder Ali, who runs Kobe Motor in Japan, told Reuters that more than 500 cars were stuck at sea after Sri Lankan ports filled with cargo diverted from Dubai. “The cars that we already shipped to Sri Lanka were kind of idling in the ocean, waiting to enter because there was no space,” he said. The vehicles were offloaded at Hambantota port over 10 days late.
Hyder Ali’s company ships around 18,000 cars a year, mostly compact Toyotas and Hondas. About 50 luxury vehicles, including Rolls-Royces, Lamborghinis, and Ferraris, are still stuck in Sri Lanka and China. “Air freight could work for some clients, but only the wealthiest can afford it,” he added.
Port congestion has caused “panic” among Japanese shipping companies, Reuters says. Some canceled shipments, others asked for $5,000 deposits per car, and some proposed rerouting cargo to Pakistan or China.
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South Korean exporters face similar problems. At Incheon port, where 80% of vehicles usually go to the Middle East, storage is crowded. Some shipments are delayed or rerouted to avoid the Strait of Hormuz. “Whenever war breaks out, we have no choice but to go into a wait-and-hold mode,” said Jin Jae-woong, president of used-car dealership Automobile International.
The conflict hit at a peak sales season, forcing Jin’s company to pay around 40 million won a month to store vehicles. Attempts to redirect shipments to Africa or Latin America have failed due to low demand.
Yun Seung-hyun, president of Ventus Auto in South Korea, told Reuters that containers sent to Dubai’s Jebel Ali port in late January remain delayed. Rising oil prices have also increased freight costs. “There’s effectively no solution right now,” he said.
Japan and South Korea exported $19 billion worth of used cars last year, with Japan accounting for just over half. Over a third of South Korea’s 883,000 vehicles went to the Middle East, and the UAE received 224,000 Japanese cars, the largest single destination.
With the Iran war ongoing, exporters face uncertain shipping routes, rising costs, and delayed deliveries, leaving small and medium-sized businesses struggling to operate.