VW, Volvo Warn Iran Conflict Compounds ‘Anxiety’ for Car Buyers

Volkswagen AG and Volvo Car AB warned that the Middle East conflict threatens demand at a time when automakers are struggling to recover from uneven electric-vehicle sales, tariffs and a slump in China.

“We see already in many markets customer sentiment going down,” Martin Sander, who oversees passenger-car sales at the VW brand, said Thursday at an industry event in London. “We’ve had a lot of uncertainty among consumers already and this is now, of course, adding another layer of anxiety.”

Volvo’s U.K. managing director Nicole Melillo Shaw said her fear is that the uncertainty delays or even stops purchasing.

“If I don’t need to and I’ve got other considerations around the cost of living going up, then maybe I won’t buy another new car,” she said at the same event hosted by the Society of Motor Manufacturers and Traders, the U.K.’s main auto lobby.

Carmakers are grappling with falling profits after tariffs imposed by U.S. President Donald Trump heaped more pressure on an industry trying to slow declines in China. An uneven EV shift also poses a problem, with increasing competition from Chinese manufacturers, which are winning over customers in Europe with affordable models.

While supply chains haven’t been impacted by the Iran conflict, business in the Middle East “has basically stopped,” Sander said.

BMW Chief Executive Officer Oliver Zipse said earlier Thursday that the war hasn’t affected its supply chains or sales.

“At this point in time, we don’t have any interruptions to our production or to our markets,” the CEO said in an interview with Bloomberg Television. “In 2020, we had corona, the year after we had supply chain issues on the semiconductor side, we had energy issues — so we will respond as always.”

Top photo: Customers with a salesperson on the forecourt of a Volkswagen AG showroom in Berlin. (Liesa Johannssen-Koppitz/Bloomberg)