The Indian automobile sector is a vital component of the nation’s economy, contributing approximately 6 percent to GDP. By 2030, it is projected that over 7.5 million vehicles will be sold annually, with around 100 million vehicles on the roads. The industry is undergoing significant transformations driven by government initiatives and increasing consumer demand.
The shares of the indian automaker have seen bearish movement after President Donald Trump announced a 25 per cent tariff on cars and car parts imported into the United States. The tariffs, slated to take effect on April 3, apply to both finished vehicles shipped into the US and to imported parts used in American assembly plants.
While India’s direct vehicle exports to the U.S. are limited, auto component makers with strong export exposure will be more affected. The auto and component sectors, primarily exporting to Europe, Japan, South Korea, and China, will feel the impact as these nations supply U.S. markets.
India is willing to cut tariffs on over half of $23 billion in U.S. imports in a trade deal to counter U.S. President Trump’s reciprocal tariffs starting April 2. The move aims to prevent trade disruptions and ease concerns among global policymakers and markets.
Additionally, India estimates that U.S. reciprocal tariffs would impact 87 percent of its $66 billion exports to the U.S., as per Reuters. In response, India is willing to cut tariffs on 55 percent of U.S. imports, currently taxed at 5 – 30 percent. The sources, speaking anonymously, revealed ongoing negotiations to ease trade tensions.
Here are the automaker stocks that can see the impact of Trump’s 25% tariff decision:
1. Tata Motors
Tata Motors Group is a top worldwide automaker. As part of the legendary multinational corporation, the Tata group, it provides the globe with a diversified portfolio of automobiles, sports utility vehicles, trucks, buses, and defense vehicles. With a market capitalization of Rs 2.47 lakh crore, the shares were trading at Rs 671.15 per share, decreasing around 5.20 percent as compared to the previous closing price.
Jaguar Land Rover (JLR), a Tata Motors subsidiary, sold about 400,000 units globally in FY24, with the U.S. accounting for 22% of sales. JLR vehicles sold in the U.S., primarily manufactured in the UK and other facilities, now face a 25% tariff, impacting their American market presence.
2. Eicher Motors
Eicher Motors Limited is an Indian multinational automotive firm located in New Delhi that makes motorbikes and commercial vehicles. Eicher is the parent business of Royal Enfield, which manufactures middleweight bikes. With a market capitalization of Rs 1.47 lakh crore, the shares were trading at Rs 5,382 per share, decreasing around 1 percent as compared to the previous closing price.
Eicher Motors may face some impact as the U.S. is a key export market for Royal Enfield’s 650cc motorcycles. Any changes in demand or regulations could affect sales and profitability. Investors will watch for shifts in strategy or market response to mitigate potential disruptions in this segment.
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3. Sona BLW Precision Forgings
Sona BLW Precision Forgings Limited is an India-based firm that manufactures precision-forged bevel gears and differential case components for automotive and other applications. The company manufactures differential assemblies, differential gears, and other products. With a market capitalization of Rs 29,734 crore, the shares were trading at Rs 478 per share, decreasing around 3.66 percent as compared to the previous closing price.
Sona Comstar, a manufacturer of automotive systems like differential gears and starter motors, derives 66% of its revenue from the U.S. and Europe. To mitigate risks, it is diversifying into China, Japan, and South Korea, targeting over 50% revenue from these markets within five years.
4. Samvardhana Motherson International Ltd
Samvardhana Motherson International Limited full system solutions provider to customers in automotive and other industries. It has a diversified product portfolio, which includes electrical distribution systems, fully assembled vehicle interior and exterior modules, automotive. With a market capitalization of Rs 92,738 crore, the shares were trading at Rs 132 per share, decreasing around 2.37 percent as compared to the previous closing price.
The company has a strong presence in Europe and the U.S., supplying components to major carmakers like Tesla and Ford. With significant local manufacturing in both regions, the company is less exposed to import tariffs than exporters relying solely on overseas shipments, ensuring a competitive edge in these key markets.
Written by Abhishek Singh
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