Tata Motors stock falls nearly 3 pc

By DASI PURNA KARTHIK

On 03 Apr 2025 16:41:28

Shares of Tata Motors declined nearly 3 per cent on Thursday with coming into effect of the tariff hike on foreign-made automobiles announced by the Trump administration on March 26.

These US tariff hikes have come to effect from midnight of April 3.

During the day, the scrip of Mumbai-based Tata Motors fell 2.58 per cent to Rs 654.50 per piece on the BSE.

According to a release by the White House, "... steel/aluminium articles and autos/auto parts already subject to Section 232 tariffs" and hence exempted from the Liberation Day announcements made by US President Donald Trump.

However, the auto parts tariff will be imposed no later than May 3, 2025.

The tariff will apply to imported passenger vehicles -- sedans, SUVs, crossovers, minivans, cargo vans -- and light trucks, as well as critical auto parts, engines, transmissions, powertrain components, and key electrical parts.

Tata Motors Ltd is the parent company of British passenger vehicle maker Jaguar Land Rover (JLR). The United States is a key market for JLR as nearly one-third of its sales in 2024 came from the US markets.

While India is not a big exporter of cars to the US, Tata Motors' luxury car subsidiary, JLR, is deeply entrenched in the American market. About 23 per cent of JLR's over 4,00,000 units sold in FY24 were in the US. These were all exported from its UK plants.

"The US has imposed 25 per cent tariffs on imported cars, light trucks and select auto parts sourced from outside of North America. Further, almost 150 auto parts will face tariffs at a similar rate," Arun Agarwal, VP - Fundamental Research - Automobiles at Kotak Securities, said.

Meanwhile, the tariff hikes have also affected shares of Bharat Forge by declining 4.6 per cent to Rs 1,099.40 apiece, Balkrishna Industries by 4.3 per cent to Rs 2,453.90, Sona BLW Precision Forgings by 3.60 per cent to Rs 449.60, Samvardhana Motherson International by 3.3 per cent to Rs 127.85 on the BSE.

On the other hand, shares of Bajaj Auto slipped by 2.87 per cent to Rs 7,840, TVS Motor Co fell by 2.08 per cent to Rs 2,442.85, Ashok Leyland by 1.9 per cent to Rs 204.60, Mahindra & Mahindra by 1.4 per cent to Rs 2,600.55 and Hero MotoCorp went lower by 1.15 per cent to Rs 3,738.55 a piece on the exchange.

The BSE Sensex benchmark declined 300.98 points or 0.39 per cent to 76,316.46.

India's auto components export to the US stood at USD 6.79 billion in FY24, while it imported USD 1.4 billion from the US at 15 per cent import duty. India's largest export items to the US are engine components, powertrains and transmissions.

Further, Agarwal said margins of suppliers may come under pressure as they may need to partly absorb cost pressures. We believe there will be some impact, which the suppliers will have to bear, leading to negative implications on margins.

The extent of impact for Indian players will also depend on the US-India bilateral agreement over the next few months, he added.