Auto Dealers Warn of Supply Disruptions as West Asia Conflict Drives Up Costs

Automobile dealers on Monday warned that supply chains and vehicle dispatches face near-term disruption as the conflict in West Asia drives up the cost of raw materials and logistics, even as the sector rounds off FY2025–26 with record retail sales. According to the Federation of Automobile Dealers Associations (FADA), the geopolitical situation has pushed oil and gas prices higher and raised the cost of key metals, including aluminium, copper and steel, that go into vehicle manufacturing. 

Also read: Auto Retail Sales Hit Record High in FY2026 With 13.3% Growth: FADA

"The broader operating environment is clouded by the conflict," FADA said in a statement, adding that elevated fuel prices were feeding through to higher transportation and logistics expenses across the auto supply chain, while also stoking broader inflationary pressure on input costs.

The warning follows a similar signal from India's largest passenger vehicle manufacturer Maruti Suzuki India which last week indicated it may raise prices in response to rising commodity costs stemming from the conflict.

As per a FADA survey, more than half of dealers had already experienced some form of supply or dispatch disruption tied to the situation. 

Around 17.1 per cent reported significant delays of three weeks or longer. On the demand side, 36.5 per cent of dealers said rising fuel prices were having a moderate to significant effect on customer purchasing decisions.

FADA further noted that the disruption has been most pronounced in the commercial vehicle (CV) segment, though passenger vehicle (PV) and two-wheeler dealers have also reported selective delays depending on the model variant.