The escalating conflict in Iran has disrupted Chinese car shipments to the Middle East, reports Caixin. The situation is paralyzing Chinese business operations in Iran and threatening the viability of the United Arab Emirates (UAE) as a crucial transshipment hub.
A source at a Chinese state-owned automaker told Caixin that his company’s business in Iran has stalled, with the ripple effects already spreading to other markets. A car trader said that many Chinese auto traders use Dubai as a transit point for exports to other markets in the Middle East and West and North Africa, but that hub is now considered unsafe due to the military operations.
The turmoil endangers a vital artery for China’s auto industry, which relies on the UAE to re-export vehicles across the region and beyond, potentially undermining its global shipment growth after a record-breaking year. In 2025, the UAE was the third-largest export destination for Chinese vehicles, trailing Mexico and Russia, according to data compiled by Cui Dongshu, secretary-general of the China Passenger Car Association (CPCA). Shipments of Chinese cars to the UAE doubled year-on-year to 567,000 units last year.