Trump Tariff Impact: From Tata Motors to SAMIL, shares of Indian automakers fall up to 8%

Auto stocks from Samvardhana Motherson Ltd. to Tata Motors Ltd. and Bharat Forge Ltd., among others are under pressure in Thursday's trading session. The sector is seeing a sentiment hit after US President Donald Trump announced that he will be imposing 25% tariffs on cars that are not manufactured in the US.

These tariffs will take effect on April 2, 2025, the day Trump will also be announcing reciprocal tariffs on countries, on which clarity is still awaited.

Shares of Tata Motors Ltd

. declined 6% as the US is a key market for Jaguar Land Rover as nearly one-third of its sales in 2024 came from North America, majorly from the US. According to JLR's annual report for the financial year 2024, 22% of its overall sales came from the US market.

Recently, the management of Tata Motors had reiterated that JLR will meet its fourth quarter guidance of 10% EBIT margins and also be net debt free by the end of this fiscal.

Samvardhana Motherson shares tumbled as much as 8%. The manufacturer of automobile components and equipment has 18% exposure to the US and its key clients include Mercedes Benz, BMW.

Meanwhile, brokerage firm CLSA expects shares of Samvardhana Motherson to potentially double over the next three years. CLSA has an 'Outperform' rating on the counter, with a price target of ₹167.

The brokerage said that Samvardhana Motherson shares have corrected nearly 35% over the last six months, led by macro concerns, tariff risks in the US and valuation de-rating.

Shares of Sona Blw Precision Forgings are also trading 4% lower today. Mexico contributes to around 2% of Sona BLW's overall revenue and while bulk of the value addition of the products happens in India, Mexico is used more as an assembly base. "If the end OEM shifts their production to US, this can be transferred to directly cater to US facilities," Elara Securities had said in its note earlier.

Bharat Forge is also in focus as it has exposure to class 8 trucks in the US. About 40% of the US class 8 trucks are built in Mexico and 65% of Canada's class 8 trucks are built in the US.