The Persian Gulf is vital for the profits of luxury car manufacturers, but the conflict in the Middle East has disrupted supplies, and some dealerships have closed. Regional sales could fall by 50%, exacerbating global market challenges for luxury car manufacturers, UNN reports, citing Autoblog.
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The Persian Gulf has long been one of the most important markets in the world of luxury cars. It accounts for less than 10% of the total sales of most top-tier brands, but it generates profits incomparable to this share, as buyers there consistently choose the most customized and, consequently, the most expensive versions of each model offered. Bentley CEO Frank-Steffen Walliser perfectly expressed this idea just weeks before the conflict began. "It's the best market in the world," he said of the Middle East. Now, as the conflict in the Middle East changes the mood and logistics of the region, this "pearl suddenly looks very fragile," the publication writes.
Several luxury car dealerships across the Persian Gulf temporarily closed their doors after fighting erupted on February 28. Ferrari and Maserati completely suspended deliveries, as car carriers found they could not navigate routes near the Strait of Hormuz. Some manufacturers began delivering supercars directly to buyers to circumvent the obstacle, an extremely expensive workaround that speaks to how much is at stake.
Ferrari halts deliveries to Middle East due to war in the region19.03.26, 15:51
Reuters reports that Bentley's CEO said buyers in the region now have "other thoughts than looking for a new Bentley." Oliver Blume of Volkswagen acknowledged that the region has "very high margins" and that the conflict "will definitely have an impact."
Bernstein Research forecast that luxury sales in the Middle East could fall by as much as 50% in the near future