Tata Motors stock falls nearly 3%

Tata Motors’ shares fell 3% on April 3, 2025, after the tariff hike on foreign-made automobiles announced by the Trump administration came into effect.
| Photo Credit: REUTERS

i Shares of Tata Motors declined nearly 3% on Thursday (April 3, 2025) with coming into effect of the tariff hike on foreign-made automobiles announced by the Trump administration on March 26.

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

During the day, the scrip of Mumbai-based Tata Motors fell 2.58% to ₹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 U.S. 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 U.S. markets.

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

“The U.S. has imposed 25% 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% to ₹1,099.40 apiece, Balkrishna Industries by 4.3% to ₹2,453.90, Sona BLW Precision Forgings by 3.60% to ₹449.60, Samvardhana Motherson International by 3.3% to ₹127.85 on the BSE.

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

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

India’s auto components export to the U.S. stood at $6.79 billion in FY24, while it imported $1.4 billion from the U.S. at 15% import duty. India’s largest export items to the U.S. are engine components, powertrains and transmissions.

Further, Mr. 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 U.S.-India bilateral agreement over the next few months, he added.