Buying a car will be expensive, impact of US-Iran tension on the pockets of the middle class?

US Iran Tension And Price Hike: The impact of increasing tension between America and Iran is now directly visible on the Indian automobile sector. Companies are under pressure in the last quarter of financial year 2026. Due to the rise in crude oil prices and increase in input costs, the profit (EBITDA margin) of companies is expected to decline by 80 to 100 basis points. Raw materials like plastic, synthetic rubber and paint used in car manufacturing have become expensive, due to which the manufacturing cost of vehicles is increasing rapidly.

Cost will increase due to shortage of industrial gas

The auto industry requires large amounts of energy and gas for production. Especially paint shops and forging units are completely dependent on gas. Due to the tension, the supply of Piped Natural Gas (PNG) has been affected, due to which companies are having to resort to expensive LNG. Experts believe that this may increase the production cost by 15% to 25%. This will have a direct impact on customers and vehicle prices may increase.

Danger of increasing waiting period

At present, auto companies have 3 to 5 weeks of stock, which can handle the initial shock. But if this geopolitical tension continues for a long time, production may slow down. In such a situation, the waiting period for new vehicles may increase, due to which customers may have to wait a long time for delivery.

Relief for CNG vehicles

Amidst this entire crisis, news of relief for CNG vehicles has come to light. The Government of India has decided to give priority to gas used for transportation. This can benefit companies like Maruti Suzuki and Bajaj Auto, which have strong CNG portfolio. Compared to petrol and diesel, the prices of CNG are not expected to increase much.

Which companies will be most affected?

According to reports, the impact of this crisis will not be equal on all companies. Companies like Maruti Suzuki, Ashok Leyland and Bajaj Auto may be more affected. In the auto component sector, pressure on Sansera Engineering and CIE Automotive may also increase.

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Increasing difficulties in export and shipping

This may affect not only manufacturing but also the export of vehicles. If the tension reaches the ‘Strait of Hormuz’, maritime trade will be badly affected. This will increase shipping costs and insurance premiums. Especially companies like Ashok Leyland, which has a large market in the Middle East, may face export delays and increased costs.

What signal for the middle class?

Overall, this global tension can directly impact the common man’s pocket. In the coming time, vehicles may become expensive and delivery delays may also increase. This is a big signal for the middle class that if they are planning to buy a car, it would be wise to take the decision in time.