US–Israel–Iran Conflict Could Disrupt the Automotive Industry

Tangerang – Geopolitical tension in the Middle East could trigger a domino effect across various sectors of the global economy, including the automotive industry. The conflict involving Iran with the United States and Israel is feared to disrupt global energy supply routes and push up vehicle production costs. Chief Operating Officer (COO) of BAIC Indonesia, Dhani Yahya, said the automotive industry is not fully immune to the impact of the conflict. “Whether CKD (completely knocked down) or CBU (completely built up), there are still imported components, so the impact is the same,” Dhani said in Tangerang on Thursday, 5 March 2026. “What we are worried about is the closure of straits that could disrupt tanker routes, causing fuel prices to rise and trigger inflation,” he said. If oil distribution is disrupted, fuel prices could soar, triggering inflation in many countries, including Indonesia. Such a condition could ultimately erode consumers’ purchasing power for new vehicles. “Moreover, import costs for cars from abroad would rise due to the influence of the US dollar. However, for now we will absorb the increased costs and will not immediately adjust prices, unless the situation becomes very severe or prolonged,” he said. This move is taken as a strategy to maintain price stability in the domestic market, while preserving competitiveness amid intensifying competition in the automotive industry.