Hyundai flags Middle East conflict as supply chain disruptions hit exports

Shipping delays and rising costs tied to regional conflict are pressuring logistics, suppliers and global deliveries.

On the Dash:

• Ongoing supply chain disruptions may lead to delayed inventory and delivery timelines.
• Rising logistics and material costs could impact pricing and margins.
• Diversions and route changes signal continued volatility in global vehicle flow.

Hyundai Motor said Friday that exports to Europe and North Africa, which typically transit through the Middle East, are being disrupted by the ongoing conflict in the region, highlighting mounting pressure on global supply chains.

The automaker said the disruption is choking key shipping routes, increasing logistics costs, delaying deliveries and adding strain on both Hyundai and its suppliers. Hyundai Motor, the world’s third-biggest automaker by sales alongside affiliate Kia Corp, warned that the impact could persist even if the conflict ends soon.

Sign up for CBT News’ daily newsletter and get the latest industry stories delivered straight to your inbox.

Kim Dong-jo, Senior Vice President at Hyundai Motor’s Global Policy Office, said rebuilding supply chains would take time. He spoke at Pyeongtaek-Dangjin Port, where government officials, logistics firms and automakers gathered to assess the situation. At the port, vehicles were lined up for shipment aboard a carrier set to transport about 4,900 units to the U.S. West Coast.

Kim said rising logistics costs and raw material constraints linked to the conflict are pressuring parts suppliers and production. Hyundai is working with suppliers and the government to minimize disruption.

Hyundai Motor Group’s logistics unit, Hyundai Glovis, said it cannot access some Middle East routes and is temporarily storing cargo at alternative locations. While routes to North America’s coasts remain largely unaffected, restricted access to the Middle East and higher fuel costs are reducing efficiency.

South Korea’s Trade Minister Yeo Han-koo said some shipments are being diverted to intermediate hubs such as Sri Lanka, where cargo is being held as companies reassess transport timing.

South Korea’s exports in March recorded their strongest growth in nearly four decades, though shipments to the Middle East fell 49%. Auto exports were little changed as supply disruptions offset strong demand for environmentally friendly vehicles.

Hyundai said it sold 358,759 vehicles globally in March, down 2.3% year over year, with domestic sales falling 2.0% and overseas sales declining 2.4%.