Hyundai Motor has been struck by supply chain disruptions due to the raging war in the Middle East, affecting its shipments to Europe and North Africa. The South Korean automaker has confirmed that although its shipments to North America’s west and east coasts have not been affected significantly, higher fuel costs have been affecting efficiency.
Several automotive manufacturers have been facing constraints in one way or another due to the ongoing military conflict in the Middle East and shipping interruptions in the Strait of Hormuz as a result.
According to a report by Reuters, choked shipping routes have been delaying deliveries, raising the cost of logistics, and increasing pressure to expedite shipping. However, this problem is beyond the control of any automaker.
If you think a de-escalation of the U.S. and Israel’s conflict with Iran would immediately solve all shipping-related issues and clear the backlog, you could be wrong.
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According to Kim Dong-jo, a senior vice president at Hyundai Motor’s Global Policy Office, the effects of the war will continue to remain for a while even if it were to stop immediately. He said:
“Even if the conflict ends, it will take a considerable amount of time to rebuild and restore existing supply chains.”
Hyundai Relies On Temporary Storage Until Shipping Operations Resume
Not only cars, but Kim also said that the supply disruptions have been adding pressure on parts suppliers, leading Hyundai to closely work with them and the government.
According to the logistics wing of Hyundai Motor Group, Hyundai Glovis, the company has been unable to utilize routes that go through the Middle East.
As a result, it has been forced to store supplies at temporary locations until the situation is deemed safe to resume logistics operations.
South Korea’s Trade Minister Yeo Han-koo confirmed this, stating that some shipments were diverted to Sri Lanka until shipping resumes.
Performance Luxury Car Deliveries Paused In The Middle East
MotorBiscuit recently reported how performance luxury car manufacturers such as Ferrari, Bentley, and Maserati halted deliveries to the Middle East amid the ongoing military conflict.
Although Ferrari transported a few cars by air, the Italian automaker has paused deliveries in the Middle East until the situation permits it to restart supplies.
Stellantis N.V.’s Maserati also decided to pull back on vehicle deliveries in the Middle East until it is safe to transport cars again. The company confirmed it was pausing supplies due to “logistical challenges and safety concerns.”
Bentley also joined the club by halting deliveries temporarily. The company’s CEO, Frank-Steffen Walliser, revealed that although the war hasn’t impacted vehicle production yet, he hinted at a drop in demand in the Middle East. He said:
“We don’t have an impact from a production side but, for sure, people in the Middle East have other thoughts than looking for a new Bentley at the moment.”
