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War against Iran threatens to shake the Middle East’s lucrative luxury car market

16:13, March 30

Luxury carmakers, long accustomed to high profits from Middle Eastern sales, are now facing uncertainty. The region, while representing less than 10% of total sales for most premium brands, generates disproportionately high revenues thanks to limited editions and bespoke customizations. But following the outbreak of the Iran conflict, many showrooms have temporarily closed and demand has sharply declined, Reuters reports.

The situation is particularly evident in the case of Rolls-Royce: their exclusive Phantom Arabesque — featuring intricate Arabic-inspired engraving and rare wood finishes — was unveiled in Dubai just a week before the military conflict began. Prices for such bespoke models can far exceed the base cost of the car; a standard Phantom starts at $572,000, while fully customized options can double or even triple that price.

Bentley, Lamborghini, Ferrari, Porsche, and Jaguar Land Rover are closely monitoring the situation, as the Middle East is where the highest-margin models are typically sold. “It’s the best market in the world,” admitted Bentley CEO Frank-Steffen Walliser. Yet most showrooms are now closed or operating at limited capacity, with sales reportedly down about a third. Top-tier models priced above $1.4 million are still selling, and some clients are willing to pay extra for shipping exclusive vehicles abroad.

A key draw in the region has been ultra-limited editions featuring gold, mother-of-pearl, or rare wood trims. In 2024, Jaguar Land Rover sold 20 Range Rover Sport SV “Sadaf” models at nearly triple the UK base price. But that segment has almost entirely frozen. “People in the Middle East are thinking about other things right now, not buying a new Bentley,” Walliser noted.

With falling demand in the U.S. due to tariffs, a steep market decline in China and Europe, and halted sales in Russia, luxury automakers now face the threat of production cutbacks. For premium brands, the situation is near-catastrophic. “For makers of premium and luxury cars, this is a complete disaster,” said former Aston Martin CEO Andy Palmer.

The war in Iran puts one of the most profitable luxury car markets at risk, forcing companies to reassess their strategies and revenue forecasts for the coming months.


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