Japanese car exports to the Middle East fell in April as the war disrupted shipping
Written by Daniel Leussink
TOKYO, May 21 (Reuters) – Japanese car exports to the Middle East nearly ended in April, a government report said on Thursday, as the U.S.-Israel conflict with Iran disrupted shipments to a key destination for global automakers such as Toyota and Nissan.
The fall suggests exports of passenger cars, trucks and buses to the region, which is also a major destination for used cars in Japan, have come to a standstill following the successful closure of the Strait of Hormuz.
Car exports to the Middle East are down more than 90% in both volume and value from a year ago, Finance Ministry data released Thursday showed, highlighting the auto sector’s exposure to shipping disruptions from the Iran war.
The region will account for 14% of Japan’s global car exports by 2025, government figures showed.
Japan’s auto industry is facing a war crisis due to transportation disruptions, said Toshihiro Mibe, vice chairman of the country’s auto lobby, on Thursday.
“The biggest impact we see is the closure of the Strait of Hormuz, which has led some manufacturers to reduce the production of cars going to the Middle East,” said Mibe.
The Japan Automobile Manufacturers Association expects the impact to be limited to shipping, he said, adding that it would continue to monitor the situation and the government said it had received a large number of chemical products other than naphtha and lubricants.
The war could pressure automakers to renew their lines later, as they seek to reduce the risks associated with collisions and the closure of the strait, analysts said.
“This is not something that will end in the short term,” said Sanshiro Fukao, chief executive at the Itochu Research Institute, a think tank that is part of the Itochu trading house, about the supply and transportation disruptions caused by the war.
“In the broader context, as companies look at the risks in the Middle East, the flow of goods could change,” he said.
SWITCHING TO INDIA
The war could accelerate the move by automakers to build a presence in India over the next three to five years and boost production and exports from there, Fukao said, as they seek to reduce risks and costs associated with shipping.
Toyota said this month they will build a new factory with the capacity to produce 100,000 cars a year in India.
The automaker said it will export cars made at the facility, which is expected to start production in the first half of 2029, to other countries.
