It is approximately 150 kilometers long from east to west and only 33 kilometers wide at its narrowest point, yet it handles 20% of the world's crude oil and 30% of the world's liquefied natural gas maritime shipments. It is also the only maritime passage for goods such as automobiles, auto parts, and minerals from the Persian Gulf to the Indian Ocean. Major oil-producing and resource-rich countries along the Persian Gulf, including Saudi Arabia, Iraq, and the United Arab Emirates, export about 80%-90% of their oil, gas, minerals, and other resources through this passage to reach global markets. This is the Strait of Hormuz, known as the "maritime choke point".

On February 28th, when the much-watched war suddenly broke out, the Strait of Hormuz was immediately put under emergency blockade. Apart from a few merchant ships turning around and changing their routes, it was reported that more than 237 giant merchant ships collectively "stalled" on radar screens... What impact will this have on the automotive industry? And how will the automotive industry break through the predicament?

Costs are rising, and "going global" is facing new challenges

As is known to all, in recent years, China has become an important country for complete vehicle exports. By the end of 2025, it had been the world's largest automobile exporter for three consecutive years. Maritime transport is the main mode of transportation for China's complete vehicle exports to the international market, accounting for more than 85% of the total transport volume of complete vehicle exports. Among them, the Asia-Europe shipping route, as a core channel, undertakes a large number of transportation tasks for Chinese automobiles exported to markets such as Europe and the Middle East.

However, the disruption of the route through the Strait of Hormuz has brought new challenges to this crucial transportation corridor. Public reports indicate that some merchant ships, including car carriers, have been forced to detour around the Cape of Good Hope, significantly increasing the transportation distance and directly leading to a rise in shipping costs. According to data from shipping companies, the original sea freight for exporting an ordinary family car to Europe was approximately $1,500, but if the detour around the Cape of Good Hope is taken, this cost will soar to over $3,000.

Some analyses suggest that how to respond is becoming a question worthy of consideration. If one chooses to bear the freight costs themselves, it will undoubtedly significantly compress profit margins and erode the profitability of enterprises; if the freight costs are passed on to overseas consumers by increasing the prices of exported products, it will reduce the competitiveness of Chinese automobiles in the international market. At the same time, another problem caused by shipping disruptions is that the delivery cycle for complete vehicle exports will be extended. Originally, the delivery cycle for shipments to Europe via the Eurasian route was usually 25-35 days; now, due to route detours and port congestion, this cycle may be extended to 50-70 days or even longer. For some overseas orders with high timeliness requirements, there will be a risk of breach of contract, which will also affect brand reputation.

It is reported that currently, six of the world's top ten shipping companies have issued emergency notices. Shipping giants such as Maersk and Mediterranean Shipping Company have explicitly required all their merchant ships to immediately suspend sailing for safety, and some container fleets have launched an alternative plan to detour around the Cape of Good Hope. This forced additional route will increase the one-way distance of the Asia-Europe route by approximately 3,500 nautical miles, which is equivalent to an extra 7-10 days of voyage if there is no congestion in the maritime waterway. Based on the current daily operating cost of ultra-large oil tankers of 180,000 US dollars, the total cost of fuel and labor alone will increase by 1.26 million to 1.8 million US dollars. At the same time, the world's three major shipping alliances are urgently adjusting their liner schedules. As a result, the comprehensive freight rate for a 40-foot container from Shanghai to Hamburg may exceed 8,000 US dollars, a surge of 120% compared with last month.

Guy Platten, Secretary-General of the International Chamber of Shipping, warned that if the lockdown lasts more than two weeks, the global maritime transport system will face a "thrombus-like" obstruction. At present, the Port of Singapore has shown signs of a shortage of container storage space, and the crude oil inventory turnover rate at the Port of Rotterdam has dropped to a dangerous level of 82%. This supply chain transmission effect may delay the delivery of auto manufacturing parts by 21 days, and extend the shipping cycle of consumer electronics to more than 45 days.

Resources are tight, and there may be supply chain risks

The Strait of Hormuz has been a "maritime fortress passage" for cultural, economic, and trade exchanges between Eastern and Western countries since ancient times. In the early 16th century, the Portuguese Empire began to invade the region, and thereafter it became an important target for competition among Britain, the Netherlands, France, Russia, and other countries in history.

In 2024, the average daily volume of oil transported through the Strait of Hormuz was approximately 20 million barrels, accounting for about 20% of the world's daily consumption. In the same year, around 20% of the global liquefied natural gas trade was also transported through it. Therefore, it is known as the "maritime lifeline" and "world oil valve" of the West. Both historically and in reality, any movement in the Strait of Hormuz can trigger a chain reaction in the global economy and markets.

Foreign media reports indicate that currently, many of the world's major oil giants and shipping companies have urgently adjusted their transportation plans and suspended transportation operations through the Strait of Hormuz. Satellite images show that multiple large merchant ships are stranded near the Strait of Hormuz. At the same time, international oil prices have risen sharply.

CCTV News reported that on March 1st, affected by the continuous escalation of the situation in the Middle East, international oil prices rose sharply. The price of Brent crude oil once rose by nearly 13% that day, reaching around $82 per barrel. Analysts pointed out that coupled with the cumulative increase in the year caused by the escalation of tensions earlier, oil prices have risen by about 17% so far this year. Meanwhile, U.S. stock futures fell in tandem. S&P 500 index futures dropped 1.1%, Nasdaq 100 index futures fell 1.2%, and Dow Jones Industrial Average futures declined by more than 500 points, indicating a significant cooling of market risk appetite. In addition, the U.S. dollar index rose 0.3%, and the price of gold climbed sharply to $5,350, showing an obvious feature of safe-haven capital inflows. This will have an impact on many key areas such as the automotive industry, energy transportation, and logistics.

It is worth noting that in the upstream of the automotive industry, mineral resources are an important cornerstone, and the Middle East also plays a significant role in this field, serving as one of the important sources of key minerals for the global automotive industry. Celestite is one such mineral; it is the core raw material for producing strontium carbonate, which plays a crucial role in the manufacturing of permanent magnet motors for new energy vehicles and directly affects the performance and efficiency of the motors.

Moreover, zinc ore exports from the Middle East also hold an important position in the global market, with its zinc ore reserves ranking among the top in the world. In automobile manufacturing, zinc is widely used in galvanized sheets to enhance the corrosion resistance of automobile bodies; at the same time, zinc is also an important raw material in auto parts such as high-voltage connectors. Some analyses suggest that the blockade of the Strait of Hormuz may directly impact the manufacturing of upstream auto parts, thereby affecting the production of complete automobiles.

Meanwhile, shipping insurance premiums have also surged by 50% due to war risks. Merchant ships sailing in high-risk areas face risks such as attacks and seizures, and insurance companies have significantly raised their premium rates to hedge against these risks. Analysts point out that coupled with rising international oil prices, which have increased ship fuel costs, multiple factors have combined to make logistics cost pressures snowball and transmit along the entire chain from upstream minerals, midstream automobile manufacturing to downstream vehicle exports. In the automobile manufacturing sector, the increased transportation costs of raw materials have led to higher costs of auto parts, resulting in a rise in the production costs of complete vehicles. In terms of vehicle exports, high logistics costs may reduce the price competitiveness of automobile exports in the international market, affecting order volumes.

Coping strategies, paths worthy of deep consideration

How to break the deadlock in the face of the challenges brought by the closure of the Strait of Hormuz has attracted much attention.

It has been reported that such impacts may be temporary in terms of time and region. Therefore, automobile companies can currently focus more on markets with non-Middle East routes such as Southeast Asia and Latin America. The demand in the automobile markets of these regions continues to grow, bringing good opportunities for automobile exports. Take Southeast Asia as an example: there is a large young population there, and the demand for cost-effective vehicles and new energy vehicles is strong.

Meanwhile, the role of land transportation routes such as China-Europe Railway Express has become increasingly prominent. With its stable transportation time and efficient customs clearance efficiency, China-Europe Railway Express has provided a new option for China's automobile exports. Some automobile companies have begun to try the "land-sea intermodal transportation" method, first transporting automobiles to inland European countries by railway, and then to the destination by road. This has effectively shortened the transportation cycle, reduced transportation costs, and opened up new market growth points.

Some analyses also suggest that from the perspective of stabilizing, ensuring, supplementing, and strengthening the automobile supply chain, increasing independent research and development is crucial, especially in links such as automotive chips and raw materials for permanent magnet motors in new energy vehicles. At the same time, it is a feasible and practical path to convert coal into basic chemical raw materials such as ethylene and propylene through the development of coal chemical technology, which can be used to produce materials needed for automobile manufacturing such as rubber and plastics. Moreover, establishing strategic reserve libraries for key components by automobile enterprises is also an important measure to deal with supply chain risks. Only by continuously strengthening the independent and controllable capabilities of the industrial chain and supply chain, constantly improving the level of technological innovation, and building a multi-dimensional guarantee system, can we grasp the initiative of development in the global changes and achieve stable growth and high-quality development of the automobile industry.

Furthermore, when the energy crisis triggered by the closure of the Strait of Hormuz struck, traditional fuel-powered vehicles and new energy vehicles were impacted in significantly different ways. This difference has highlighted the strategic foresight of China's vigorous development of new energy vehicles. Compared with traditional fuel-powered vehicles that rely on oil, new energy vehicles have demonstrated stronger risk resistance capabilities. Moreover, with the continuous improvement of China's charging piles and other infrastructure, the convenience of using new energy vehicles is gradually increasing.

Experts believe that this not only reflects the advantages of new energy vehicles in energy utilization, but also confirms the strategic foresight of China's vigorous development of the new energy vehicle industry. This has enabled China to find an effective path to achieve stable and sustainable development of the automobile industry and reduce energy dependence against the backdrop of uncertain risks in the global energy landscape. It has also forced traditional automakers to accelerate their transition to electrification, responding to many uncertainties with certainty.

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