From Tata Motors to Bajaj Auto: Here’s how auto stocks reacted to Trump's tariffs

Following U.S. President Donald Trump's unexpectedly stringent tariff announcement overnight, Indian stock markets experienced volatile trading at the opening on Thursday, mirroring weakness in Asian peers and sharp correction in U.S. futures. Auto stocks were among the worst hit amid fears that a 25% tariff on foreign-made vehicles would negatively impact demand and disrupt supply chains. The tariffs will be effective immediately at midnight Eastern Time.

Weighed down by the development, all major auto stocks, including Tata Motors, Maruti Suzuki India, Mahindra and Mahindra, Bajaj Auto, and Hero MotoCorp, slipped into negative terrain in early trade. The BSE Auto index was down 1.2%, while the benchmark indices BSE Sensex and NSE NSE Nifty fell up to 0.5% in the first hour of trade so far.

Among auto heavyweights, Bajaj Auto was the top loser, falling nearly 3% amid concerns over U.S. business. Its U.S. businessprimarily focuses on manufacturing and exporting motorcycles, including KTM and Husqvarna models.

Tata Motors was also among the top laggards, declining up to 2.5% amid fears that U.S. tariff decision could impact its U.K. subsidiary, Jaguar Land Rover (JLR), exports. JLR has a significant presence in the American market, which accounted for 22% of its total sales in FY24.

On the other hand, Mahindra and Mahindra, Maruti Suzuki India, Hyundai Motor India, and Hero Motocorp were down with marginal losses. Among others, Eicher Motors, SML ISUZU, Ashok Leyland, and OLA Electric Mobility were also flashing in red, falling in the range of 0.5-2%.

Impact of Trump’s auto tariffs on Indian players

According to market expert, Trump’s 25% tariffs on automobile and auto part imports into the United States is likely to hit Japanese, German and Korean automakers the most. As Indian automobile manufacturers, except for Tata Motors’ JLR and Eicher Motor’s Royal Enfield motorcycles, don’t export vehicles to the U.S, so they would be limited impact.

However, auto component makers with substantial export exposure will feel the heat of tariff hike. The new auto tariffs are expected to hit auto parts makers like Samvardhana Motherson International, the country’s largest auto component exporter, and Sona BLW, Fortune India reported last week.

Vivek Chaand Sehgal-led Motherson, which operates over 400 units in 44 countries, has several auto component units in Mexico which mainly cater to the US market. Mexico contributed 4% to the company’s revenues in FY24. Similarly, Gurugram-based Sona BLW, which gets over a third of its revenues from EV component exports, has manufacturing facilities in Mexico among other countries.

India exported $2.2 billion worth of auto parts to the U.S. in 2024, comprising 29.1% of its global auto part exports, according to New Delhi-based think tank Global Trade Research Initiative (GTRI).

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