Hyundai Motor said on Friday that its exports to Europe and North Africa are being disrupted by the ongoing conflict in the Middle East. Shipments that normally pass through the region are facing delays, higher costs, and logistical bottlenecks.
The warning underscores the growing strain on global supply chains. Key shipping routes through the Middle East are being choked by the conflict, and the ripple effects are reaching automakers and their suppliers alike.
Hyundai, ranked third globally by sales alongside its affiliate Kia, made it clear that the damage won’t disappear overnight. Even if the Iran war ends soon, recovery will take time. Senior Vice President Kim Dong-jo, speaking at Pyeongtaek-Dangjin Port southwest of Seoul, put it bluntly: rebuilding existing supply chains will require a considerable amount of effort and patience.
Rising costs and pressure on suppliers
Beyond shipping delays, the conflict is also driving up logistics costs and squeezing raw material sourcing. As a result, parts suppliers and production lines are feeling the pressure. Hyundai said it is actively working with both suppliers and the South Korean government to minimize the impact.
Meanwhile, Hyundai Glovis — the group’s logistics arm — confirmed that some Middle East routes are currently inaccessible. The company is temporarily storing cargo at alternative locations until conditions stabilize.
Routes to North America’s west and east coasts remain largely unaffected for now. However, restricted access to the Middle East and rising fuel costs are still hurting overall efficiency.
Shipments rerouted to Sri Lanka
South Korean Trade Minister Yeo Han-koo attended a meeting at the port alongside government officials, logistics firms, and automakers. He confirmed that some shipments are being diverted to intermediate hubs such as Sri Lanka. Cargo is being held there while companies wait for transport to resume.
That rerouting is already creating new problems. Last month, reports surfaced that used car exports from Japan were unable to enter Sri Lanka. The reason: ports were already congested with cargo diverted from Dubai due to the same conflict.
Sales and exports feel the impact
The disruption is starting to show in the numbers. Hyundai sold 358,759 vehicles globally in March — a 2.3% decline compared to the same period last year. Domestic sales fell 2.0%, while overseas sales dropped 2.4%.
At a broader level, South Korea’s total exports posted their strongest growth in nearly four decades during March. However, shipments to the Middle East plunged 49%. Auto exports were essentially flat, as supply disruptions offset strong demand for environmentally friendly vehicles.
On Friday, shares of Hyundai Motor and Hyundai Glovis closed down 1.2% and 0.7% respectively. That contrasted sharply with the benchmark KOSPI index, which rose 2.7%.