BASF CEO warns Iran war could halt auto production

BASF CEO Warns Iran War Risks Halting Automotive Production in Second Half of 2026

BASF SE CEO Markus Kamieth warned on Tuesday that the US-Israeli conflict with Iran is creating a “creeping risk” of material shortages that could halt automotive production lines in the second half of 2026, as the war’s economic fallout spreads across global supply chains.

Chemical Giant Flags Shortages of Critical Inputs

Speaking at a press event in Frankfurt, Kamieth said rising inflation and supply chain disruptions stemming from the conflict have darkened the outlook for the auto sector and the broader economy. Shortages of materials including sulfur and helium are already emerging, he said, warning that tightly managed supply chains like those in car manufacturing are particularly vulnerable.yahoo

“There’s downside risk I can see for the second half of this year,” Kamieth said. “There is this creeping risk that at some point a material won’t be available.”yahoo

The warning comes as a Reuters analysis published in May found the Iran war has imposed costs exceeding $25 billion on global corporations through escalating energy expenses, disrupted trade routes, and operational adjustments linked to Iran’s control over the Strait of Hormuz. A Morningstar assessment noted that industries spanning chemicals, technology, and autos are all facing disruption from stunted trade flows through the strait.reuters

UK SMEs Near “Tipping Point” as Costs Surge

The strain is hitting smaller businesses hard. A report published on Tuesday by Bibby Financial Services found that seven in ten UK small and medium enterprises trading internationally fear they could be pushed into bankruptcy if disruption linked to the Iran conflict continues. The data revealed SMEs have lost nearly £40,000 on average since the conflict began.bibbyfinancialservices

The findings align with broader UK economic weakness. The preliminary UK Composite Purchasing Managers’ Index for May fell to 48.5 from 52.6 in April — below the 50.0 growth threshold for the first time since 2025, according to Reuters.reuters

Automakers Pass Rising Costs to Consumers

BMW Group India on Monday announced a price increase of up to 2% across its BMW and MINI vehicle range, effective July 1, citing “rupee depreciation and escalating logistics costs.” It marks the company’s second such increase this year after a similar adjustment in April 2026.fortuneindia

The broader automotive sector has been contending with supply chain pressures since the conflict began disrupting Strait of Hormuz shipping routes earlier this year, forcing manufacturers to absorb or pass along higher input and transportation costs.automotivelogistics