War heats up used cars in Dubai: 55,000 vehicles flowed into Iran in half a year, and 80% passed through the United Arab Emirates

Since the outbreak of the conflict on February 28, about 55,000 foreign cars have entered Iran, worth more than 1 billion euros, of which about 70%-80% have entered Iran through the United Arab Emirates...

According to a survey by Asharq Bloomberg, the 2026 Middle East conflict not only reshaped regional shipping and energy trade, but also unexpectedly changed the flow of used cars. Since the outbreak of the conflict on February 28, about 55,000 foreign cars have entered Iran, with a value of more than 1 billion euros; combined with data from the Iranian industry and trade department and local market information, about 70%-80% of these vehicles have entered Iran through the United Arab Emirates.

This has ushered in an unexpected peak season for used car dealers in Dubai and Sharjah, who were originally worried that the war would drag down their businesses. The United Arab Emirates itself is one of the largest used car trading and re-export centers in the Middle East. IMARC Group estimates that the United Arab Emirates used car market will be approximately US$5.8 billion in 2025. Today, Iran's sudden release of import demand has given another boost to this mature vehicle source and entrepot system.

Iran re-liberalizes imports, and the free trade zone becomes a "key entrance"

Iran banned the import of foreign cars in 2018 to reduce foreign exchange outflows and protect local industries. However, long-term restrictions have also led to a reduction in the supply of imported cars and an increase in prices. As the market gap widened, especially during the war, Iran's car import policy began to loosen.

Reported that Iran has allowed the import of used cars no more than 5 years old, and allowed qualified overseas Iranian residents to import a personal car. At the same time, Kish Island and Bandar Anzali free zone along the Caspian Sea have become important nodes for foreign cars to enter Iran.

According to the free zone policy, foreign cars can enter relevant areas free of tariffs. Originally, vehicles in the Anzali Free Zone were mainly limited to the use of Gilan Province. However, in mid-March 2026, Iran introduced temporary measures to allow relevant vehicles to drive to other Iranian provinces, including the capital Tehran, for up to three months. There is a possibility of extension.

A person familiar with Iran's industry and trade department told Asharq Bloomberg that these institutional changes have reduced the cost of importing foreign cars and also allowed traders to see obvious room for price arbitrage. Vehicles entered first under the free zone policy and then entered the markets of large cities such as Tehran to compete with domestically produced vehicles that continued to increase prices during the war.

However, Iran has also noticed the problem of some importers using temporary policies to expand commercial activities and is assessing the impact of relevant measures on the market. This means that the current window has obvious policy sensitivity and cannot be simply regarded as a long-term stable import system.

Dubai and Sharjah have become Iran's "vehicle source warehouses"

The ability of the United Arab Emirates to quickly accept orders from Iran is directly related to the local huge inventory of used cars and the mature re-export system.

A Sharjah used car dealer under the pseudonym "Abu Mukhtar" recalled that in the early stages of the conflict, they were prepared for a market collapse. Stagnation in tourism and the possibility of foreign employees leaving the country usually means an increase in the selling of used cars and a decline in demand for car purchases. But the reality is quite the opposite: "Last year was a boom in car exports to Syria, and this year it's Iran."

The war also pushed logistics costs to extremes. A merchant at Al Aweer Auto Market in Dubai said that the transportation fee for a batch of cars he was waiting for suddenly jumped from US$1800 to US$9000, and he even considered closing the store at one point. However, as Iran's procurement volume expanded rapidly, new orders eventually offset some of the logistics impact.

Currently, these transactions do not rely entirely on the traditional letter of credit and banking system, but are largely completed through Iranian middlemen, money changers and regional logistics companies living in the United Arab Emirates. "Reza", an Iranian middleman interviewed by the report, said that he would look for cars at Dubai and Sharjah Auto Markets based on the list of requirements sent by Iranian customers through WhatsApp, complete vehicle inspection, take photos and confirm before purchasing.

At the peak of demand, he purchased 50 cars a day from more than 4 car dealers and individual sellers.

Transportation routes are also very flexible. According to reports, some cars are transferred by land through Iraq or Uzbekistan, while some vehicles are first shipped to Oman and then entered Iran by sea. The direct destination on some export documents is not necessarily Iran, and the final flow of vehicles may be determined by subsequent trade links.

China used car exporters need to be particularly reminded here that transactions with multiple transhipment and opaque final destinations have obvious sanctions, export control, financial and insurance compliance risks. Just because a vehicle completes legal export procedures in an intermediate country does not automatically mean that there will be no compliance issues in the subsequent final flow.

Iranian buyers 'tastes have also changed: black luxury cars sell better

Another change in Iran's car demand during the war was "everything".

Reza said that before the conflict, Iranian customers preferred small cars, pickup trucks and lower-priced South Korean cars; during the war, the scope of procurement expanded rapidly, from pickup trucks to German luxury cars such as BMW and Mercedes-Benz, among which the Mercedes-Benz S-Class, E-Class and GL series are particularly popular.

Moreover, Iranian buyers have a higher tolerance for mileage. Even if the vehicle has traveled 100,000 or even 200,000 kilometers, some people are willing to buy it as long as there is no accident record and no repainting.

Color preferences are also interesting. Iranian luxury car buyers particularly like black, which is not the most popular color in the United Arab Emirates second-hand market, which in turn allows traders to obtain car sources at relatively low prices. For those who make exports, this "mismatch of preferences" between the terminal market and the vehicle source market is often where profit margins lie.

written in the end

Iran's 55,000-vehicle import surge of more than 1 billion euros indicates that the used car trade in the Middle East is rapidly diverting due to war, policy loosening and free zone rules. The United Arab Emirates has enjoyed the largest increase by virtue of its inventory, financial and logistics advantages. For China's second-hand car exporters, what is worth studying is Iran's real demand for used cars, accident-free high-mileage vehicles, pickup trucks and mid-to-high-end models within five years, rather than copying the entrepot route of United Arab Emirates businessmen. Especially if the final destination involves Iran, sanctions, bank settlement, insurance, shipping and export control risks all need to be checked on a case-by-case basis; short-term profits often come from uncertainty in policy and geopolitical situations, and may also disappear quickly as temporary policies are lifted. Opportunities from vehicle sources can be pursued, but the destination of end users, funds and logistics must be clearly seen.

Source: Guangdong Good Car

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