Tata Motors, Samvardhana Motherson shares skid up to 7% on Trump’s 25% auto tariffs

Shares of Tata Motors and Samvardhana Motherson International witnessed sharp selling in opening trade on Thursday after U.S. President Donald Trump announced 25% tariffs on car imports to United States. Weighed down by the development, Tata Motors and Samvardhana Motherson shares plunged up to 7% in early trade today, while the BSE Auto index fell over 2% in the first hour of trade so far. Meanwhile, the equity benchmarks Sensex and Nifty50 were trading higher by 0.5% after flat opening.

Early today, Tata Motors share price opened 4.8% lower at ₹673.95 against the previous closing price of ₹707.95 on the BSE. Extending opening losses, the auto heavyweight dropped as much as 6.6% to ₹661.35, while the market capitalisation slipped to ₹2.46 lakh crore.

In a similar trend, Samvardhana Motherson shares tumbled as much as 7.6% to ₹124.75 on the BSE. At the time of reporting, the counter was down 4% at 129.55, with a market cap of ₹91,152 crore.

In the auto space, Mahindra and Mahindra, Bajaj Auto, Hyundai Motor India, Eicher Motors, SML ISUZU, and Ashok Leyland were trading in red, falling in the range of 1-2%. On the other hand, Maruti Suzuki India, Hero Motocorp, and OLA Electric Mobility were trading higher with marginal gains.

U.S. President Donald Trump on Wednesday unveiled a 25% tariff on imported cars and light trucks starting next week, widening the global trade war he kicked off upon regaining the White House this year. The move is expected to drive up prices and stymie production, said Devarsh Vakil, Head of Prime Research at HDFC Securities.

According to industry expert, direct export of fully assembled vehicles from India to the U.S. is limited, but auto component makers with substantial export exposure will feel the heat of tariff hike.

In case of Tata Motors, the auto major does not export directly to the U.S., but its U.K. subsidiary, Jaguar Land Rover (JLR), has a significant presence in the American market, which accounted for 22% of its total sales in FY24. Among others, U.S. is a major export market for for Eicher Motors’ Royal Enfield 650cc motorcycles.

“Trump’s latest decision to impose a 25% duty on all car imports to the U.S. will impact Tata Motors which exports a significant chunk of JLR cars to the U.S.” said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.

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