US President Donald Trump has imposed 25% tariff on all car and component imports into the US, with a view to encourage domestic manufacturing. While India is not a big exporter of cars to the US, the tariffs may have an indirect impact on some of the listed Indian companies -- particularly those that supply auto components to international car manufacturers. One major exception is Tata Motors, whose UK subsidiary, JLR, does generate a substantial chunk of its revenue from the US market. We look at the major Indian auto and auto-related stocks to watch in the context of the new tariffs.
- Tata Motors: Shares dropped significantly, and are still down nearly 6%. This reaction is largely due to its subsidiary, Jaguar Land Rover (JLR), which has a strong U.S. presence, accounting for 22% of its FY24 sales. Although JLR vehicles sold in the U.S. are primarily manufactured in the UK and other international plants, they are now subject to the tariff.
- Samvardhana Motherson: This major auto parts supplier saw its stock fall by as much as 7% today, hitting a low of ₹124.73 on the NSE. The U.S. is a key market, contributing 20% of its total revenue, and the tariffs could also have secondary effects on its clients, particularly those in Europe.
- Sona BLW Precision Forgings (Sona Comstar): Shares are down by over 5% today. North America, led by the U.S., accounts for a substantial chunk of its revenue, making it vulnerable to the tariff's ripple effects on auto parts.
- Balkrishna Industries: Shares shed approximately 3.4%, but are now down only 1.9% as it supplies tires for vehicles that could be indirectly affected through international markets.
- Endurance Technologies: Specializing in aluminum castings, suspension, and braking systems, Endurance exports to North America, though Europe is its larger market. Its stock is down about 1.7%. The tariff’s indirect impact via U.S.-bound OEMs could affect demand, but its diversified geography might soften the blow.
- UNO Minda: This firm supplies auto components like lighting, sensors, and switches, with some U.S. exposure through global OEMs. Its stock are down about 2.4% today. While its U.S. export share is smaller, any disruption in global supply chains could ripple back to its operations.
- Minda Corporation: It is an India-based automotive component manufacturer, specializing in safety and security systems for two-wheelers, three-wheelers, passenger vehicles, and off-road vehicles. The company serves major OEMs globally. The company exports to markets such as USA, UK, Europe, and Southeast Asia, but specific numbers for the US are not available. The stock is down 2%.
- Exide Industries: A leading battery manufacturer, Exide exports automotive batteries to the U.S., though the U.S. market forms a smaller portion of its revenue compared to domestic sales. Its stock fell by about 2% today, but are now down only 0.5%. There are concerns over potential cost increases or reduced demand from U.S.-bound supply chains. The impact may be cushioned by its strong domestic focus.
- Suprajit Engineering: A producer of automotive cables and lighting systems, Suprajit has a global presence, including exports to the U.S. Its shares are down around 2.4%. With manufacturing facilities in the U.S., it may offset some tariff effects, but its export-driven revenue could still face headwinds.
- MRF: Known for tires, MRF has a modest but growing export footprint, including to the U.S. It is down about 1.2%. The tariff could affect its sales to U.S.-linked supply chains, but its primary revenue from India and other markets might limit the damage.
- Bharat Forge: This company, which supplies components globally and has ties to U.S. markets (including Tesla), experienced a drop of around 3% today. The tariffs impact its exports of auto parts, especially if trucks are included in the tariff scope.
- Amara Raja Batteries: A major battery supplier, Amara Raja exports to the U.S., particularly for automotive and industrial applications. Its shares dropped are down around 0.6%, but are trading flat now. While it has a growing international presence, the tariff’s indirect effect via global OEMs (original equipment manufacturers) could pressure margins, though its diversified client base may mitigate severe impacts.
- Sansera Engineering: This company manufactures precision components like connecting rods and rocker arms, with exports to the U.S. and Europe. The stock is trading flattish.
- Eicher Motors: Not directly affected by the tariffs, but shares fell nearly 2% initially -- and are still down 0.5% -- over fears that any inclusion of motorcycles in the tariff regime could affect it.
None of the major Industry associations in India have commented on the US decision to impose the tariffs, which are currently limited to the PV segment and components used in the manufacturing of PVs.