Iran War Threatens Middle East Automotive Market
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 18 2026
0mins
Should l Buy RACE?
Source: CNBC
- Market Share Decline: European luxury brands like Porsche and Mercedes-Benz are increasingly reliant on the Middle East for profits due to declining market shares in China and rising tariffs in the U.S., despite the region's annual volume being around 3 million vehicles, which is less than a fifth of the U.S. market.
- High-End Demand Growth: The UAE alone sees annual sales exceeding 300,000 vehicles, with about 20% being premium imports, indicating strong demand from wealthy buyers, although the ongoing Iran war poses potential risks to this demand.
- Porsche Sales Growth: In 2025, Porsche's profit per vehicle sold increased by 28% compared to 2020, with the 911 model now accounting for 20% of the brand's total sales in the region, reflecting robust growth in its ultra-high-end customization business.
- Uncertain Market Outlook: While both Mercedes-Benz and BMW report double-digit sales growth in the Middle East, the ongoing conflict creates uncertainty in market dynamics, potentially impacting future sales and supply chains.
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Analyst Views on RACE
Wall Street analysts forecast RACE stock price to rise
15 Analyst Rating
11 Buy
3 Hold
1 Sell
Moderate Buy
Current: 317.400
Low
349.74
Averages
448.83
High
555.00
Current: 317.400
Low
349.74
Averages
448.83
High
555.00
About RACE
Ferrari NV, known as Ferrari, is an Italy-based designer, manufacturer and retailer of sports cars that is incorporated in the Netherlands. It operates under the Ferrari brand. Its sports cars portfolio includes, among others, F12berlinetta, FF, Ferrari 488 GTB, 488 Spider, 458 Speciale, Ferrari California T, F12tdf and LaFerrari. The Company also offers financing services through Ferrari Financial Services. It also produces limited series and one-off cars. The Company divides its regional markets in EMEA (Europe, the Middle East, India and Africa), Americas, Greater China and Rest of APAC (Asia-Pacific region, excluding Greater China) and is active in over 60 markets worldwide through a network of authorized dealers.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Ferrari's Competitive Edge: Despite a roughly 34% drop in Ferrari's stock over the past six months, it has nearly tripled the returns of the S&P 500 over the last decade, showcasing its strong competitive position and brand value in the luxury automotive market, with a unique sales strategy that excels during economic cycles.
- Nvidia's AI Dominance: Nvidia has become the backbone of AI infrastructure expansion by providing GPUs for global AI data centers, with substantial growth in demand expected through 2030, further solidifying its market position and profitability.
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- Middle East Sales Forecast Drop: Analysts predict that luxury sales in the Middle East could fall by half, which would negatively impact overall quarterly growth by about 1 percentage point, underscoring the region's critical role in the global luxury market.
- Dubai's Luxury Consumption Dependency: Research from Morgan Stanley indicates that around 60% of luxury spending in the UAE comes from tourists, primarily from Russia, Saudi Arabia, China, and India, and the deteriorating security situation may dampen these high-net-worth visitors' spending intentions.
- Market Sentiment Turns Bearish: A UBS report highlights that investor sentiment in luxury is the most bearish in years, with geopolitical uncertainties likely to weigh on near-term earnings and delay the long-anticipated recovery in the luxury sector.
See More
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- Rare Opportunity: Broad Arrow presents a unique chance to acquire a Ferrari Monza SP2 at the Concours d'Elegance Villa d'Este.
- Event Details: The auction will take place at a prestigious event known for showcasing classic and luxury automobiles.
See More
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- Resumption of Shipments: After a week-long pause due to regional conflict, Ferrari has resumed shipments to the Middle East, demonstrating its ability to adapt in uncertain environments and meet customer demands.
- Contingency Measures: To address disruptions in the Strait of Hormuz, Ferrari implemented contingency measures, including rerouting ships and using planes to transport a limited number of vehicles, despite significantly increased shipping costs.
- Customer Willingness: Even with air freight costs ranging from $20K to $40K, Ferrari owners are willing to pay the additional fees to ensure safe delivery, reflecting the brand's strong allure and customer loyalty.
- Market Confidence: Giorgio Turri, Managing Director of Ferrari Middle East, confirmed that there were no cancellations, emphasizing customers' long-term commitment to the brand, indicating resilience in the luxury market amid turmoil.
See More
