Donald Trump imposed a 25% tariffs on all imports from Mexico and Canada starting today. Both these stocks had recovered after the initial tariff imposition last month was paused for a month.
India’s auto component exports to Mexico comprise of 3% of total exports $21.2 billion, amounting to $656 million, according to a note from Elara Securities last month.
“Our industry interactions suggest these could be mainly metallurgical components like forgings and casting products,” the brokerage said.
Mexico contributes to 4% of Samvardhana Motherson’s overall revenue, according to Elara, who added in a note last month that it remains to be seen how OEMs shift their production base to avoid the rise in vehicle prices in the US owing to the tariffs..
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,” the Elara note said.
Shares of Samvardhana Motherson are down 13% over the last one month while those of Sona BLW are down 3%. Both these stocks have corrected 45% and 36% from their recent peaks respectively.
