【By Observer Net, Xiong Chaoran】The ongoing conflict among the US, Israel, and Iran has directly led to Iran closing the vital global strait of Hormuz, causing a sudden disruption in trade. Currently, more than 10 car carrier ships are stranded in the Gulf region, including vessels related to Japan.

According to a March 7 report by Nikkei Asia, the closure of the Hormuz Strait has effectively cut off Japan's connection with Dubai, one of the world's largest used car export hubs. The UAE is an important trading center for used cars destined for the African and Middle Eastern markets, with about 400 used car dealers operating in the Dubai Auto Zone. Companies operating within the Dubai Auto Zone can be exempt from tariffs and corporate income tax if they meet certain conditions.

An industry insider revealed that the current regional tensions have forced ships to return to Japan, creating a question over who should bear the cost of re-importing used cars back to Japan. Additionally, used cars waiting for export will incur storage fees.

"If this situation continues for a long time, it will become a major obstacle for Japan's automotive industry," said Shigemi Mitsuo, a senior researcher at the Itochu General Research Institute.

The report stated that if Japan faces a shortage of used cars, relatively inexpensive Chinese electric vehicles may flow into Africa as an alternative. Shigemi Mitsuo said, "Unsold Chinese vehicles can enter Dubai via land routes."

On August 1, 2025, vehicles waiting for export at Yokohama Port near Tokyo. IC Photo

According to the report, generally, used cars exported from Japan and South Korea first arrive in the UAE before being re-exported. However, the closure of the Hormuz Strait has made UAE ports currently inoperable.

Be Forward, a used car website based in Tokyo with a large business in Africa, has already suspended orders from the UAE as of March 4 local time.

A prolonged interruption of the UAE's status as a trading hub will have a chain reaction on global used car prices. Especially in the Middle East and Africa, supply shortages could lead to price surges.

At the same time, Japan, as an export powerhouse, faces the threat of falling used car prices. According to data from the Japan Used Car Exporters Association, used car exports from Japan increased by 9% year-on-year in 2025, reaching a record 1,708,604 units, with the UAE accounting for 15% of the total volume, ranking first among destination countries.

In Japan, most used cars are sold through auctions, with about half being exported. Now, the inability to export to the UAE is expected to result in inventory remaining in Japan, thus lowering bid prices.

Auction clearance prices are considered the benchmark for used car transaction prices. The automotive research institution under Recruit Holdings, a comprehensive human resources service company in Japan, has expressed concerns about the risk of falling auction prices.

"There is a growing caution about potential price declines in the market," said a manager from the Japanese used car dealer Idom.

According to data from auction company USS, the average clearance price of Japanese used cars reached a historical high in February this year, driven by the weak yen and a shortage of mid-term vehicles.

The increase in auction prices has put small and medium-sized Japanese used car dealers at a disadvantage when competing with overseas buyers. If auction prices fall, it might also mean that Japanese consumers can buy cheaper used cars.

However, a decline in used car prices would lower the value of old cars, which could negatively impact Japan's new car sales.

Nikkei Asia reported that there are almost no Japanese car assembly plants in the Middle East. Japanese automakers usually export finished vehicles to the region. According to data from the Japan Automobile Manufacturers Association (JAMA), Japan exported approximately 210,000 cars to Saudi Arabia and about 90,000 cars to the UAE in 2025. It should be noted that JAMA's data includes passenger cars, but also trucks and buses.

The report stated that approximately 10 to 15 car carrier ships depart from Japan each month heading to the Middle East, each capable of carrying up to about 5,000 vehicles, with their main port of call being Dammam Port on the Persian Gulf coast of Saudi Arabia.

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Original: toutiao.com/article/7614361650115854848/

Statement: This article represents the personal views of the author.