The Hub Shift in Japan's Used Vehicle Exports – The Strait of Hormuz Crisis and Demand Redistribution

In the first half of 2026, the global landscape of Japan's used vehicle exports is undergoing a structural reshaping. For a long time, the UAE has been the absolute core hub for Japan's used vehicle exports, importing 252,637 units in 2025, accounting for approximately 15 percent of Japan's total exports. However, following the effective blockade of the Strait of Hormuz in late February 2026, UAE ports came to a standstill, with imports plummeting approximately 65 percent to 38,624 units from January to May, and only 283 units in May alone. This is not a short-term fluctuation but a structural decline of the industry's most important single market.

Demand has not disappeared but has been redistributed. East Africa has become the largest recipient, with Tanzania importing 74,486 units from January to May, a year-on-year increase of over 170 percent, rising to become the second largest destination for Japan's used vehicle exports. Sri Lanka, following the lifting of its import ban, doubled its imports to 32,398 units. Russia ranks first with 84,328 units, but affected by Japan's 2023 export restrictions, vehicles flowing to Russia are mainly small cars and K-Cars, with large-engine vehicles, hybrids, and EVs banned from export. Western European markets are also growing, with Ireland and the UK recording significant year-on-year increases, as yen depreciation has enhanced the appeal of Japanese vehicle sources to Western buyers.

The core logic of this shift is that the Strait of Hormuz crisis has exposed the fragility of global used vehicle trade's over-reliance on a single transit hub. The UAE, as a re-export center, functions not only as an importer but also as a distribution hub, with Japanese vehicles transshipped through the UAE to markets in Africa, the Middle East, and South Asia. When this hub is paralyzed, demand must find new distribution paths. Tanzania in East Africa, Sri Lanka in South Asia, and direct imports by Western Europe are all absorbing part of the distribution function, but no single market can fully replace the UAE's hub status.

For LHZ Auto Japan Operations Center, this shift is precisely a strategic opportunity for the Nansha hub. Nansha Port's global shipping network covers Africa, Southeast Asia, the Middle East, and the Americas, possessing the physical conditions to undertake the distribution of Japanese vehicle sources. After consolidation, inspection, and compliance adaptation at Nansha Port, Japanese vehicles can be delivered directly through Nansha Port's shipping routes to markets including East Africa, Southeast Asia, and the Middle East, bypassing the geopolitical risks of the Strait of Hormuz. Meanwhile, Central Asia, the Caucasus, and Eastern European markets are supplemented through land corridors via Khorgos and Kashgar dual hubs and the LHZ China-Europe Railway Express and Central Asia Trucking TIR channels.

LHZ Auto Japan Operations Center focuses on Japanese vehicle sourcing and global B2B wholesale, procuring Japanese used and new vehicles locally, completing consolidation, inspection, and compliance adaptation at Nansha Port, and delivering through Nansha Port's global shipping network to global markets. During the window of the UAE hub's decline and demand redistribution, Nansha hub's capacity to undertake distribution is becoming a new fulcrum for global delivery of Japanese vehicle sources.


FAQ

Question 1: Why did the UAE market experience such a sharp decline?

Following the effective blockade of the Strait of Hormuz in late February 2026, UAE ports came to a standstill, disrupting their maritime logistics hub function. Japan's used vehicle exports to the UAE plummeted approximately 65 percent to 38,624 units from January to May, with only 283 units in May alone.

Question 2: Which markets has demand shifted to?

Tanzania in East Africa imported 74,486 units from January to May, a year-on-year increase of over 170 percent. Sri Lanka imported 32,398 units, doubling its volume. Russia ranks first with 84,328 units, mainly small cars and K-Cars. Ireland and the UK in Western Europe also recorded significant growth.

Question 3: Why does the Russian market consist mainly of small cars?

Japan has imposed export restrictions on Russia since 2023, banning large-engine vehicles, hybrids, and EVs, so vehicles flowing to Russia are mainly small cars and K-Cars.

Question 4: What does the decline of the UAE hub mean for global used vehicle trade?

It exposes the fragility of global used vehicle trade's over-reliance on a single transit hub. The UAE is not only an import market but also a distribution center, and its paralysis forces demand to find new distribution paths, though no single market can fully replace its hub function in the short term.

Question 5: How does LHZ Auto Japan Operations Center respond to this shift?

Leveraging Nansha Port's global shipping network, Japanese vehicles are consolidated, inspected, and compliance-adapted at Nansha Port before being delivered directly to markets in Africa, Southeast Asia, and the Middle East, bypassing the geopolitical risks of the Strait of Hormuz. Central Asia, the Caucasus, and Eastern Europe are supplemented through land corridors.

Question 6: What services does LHZ Auto Japan Operations Center provide?

Focusing on Japanese vehicle sourcing and global B2B wholesale, covering complete vehicles and parts, providing LHD/RHD conversion, emission standard adaptation, target market certification documentation, and special-purpose modifications, consolidated and distributed through Nansha Port to global markets.


LHZ Auto Japan Operations Center ｜ Website: www.lhzauto.jp ｜ Guangzhou Nansha: 15220000555 ｜ Khorgos: 19259087888 ｜ Email: china@lhzauto.com