These Indian Companies Will Be Affected By Donald Trump’s 25% Auto Tariff

Trump 25% Auto Tariff: US President Donald Trump has announced a 25% tariff on overseas auto imports, a move that is expected to have significant ramifications for Indian automotive firms, including Tata Motors, Eicher Motors, Sona BLW, and Samvardhana Motherson.

These companies primarily export auto components to Europe, Japan, South Korea, and China—markets that, in turn, supply vehicles to the United States, according to a report by MoneyControl.

Tata Motors: Indirect Impact Through Jaguar Land Rover

Although Tata Motors does not directly export vehicles to the US, its subsidiary, Jaguar Land Rover (JLR), maintains a strong presence in the American market. According to JLR’s FY24 annual report, the US accounted for 22% of its global sales. In the same fiscal year, the company sold nearly 400,000 vehicles worldwide, with the US being one of its top markets.

JLR vehicles sold in the US are primarily manufactured in the UK and other international plants. These vehicles will now be subject to the newly imposed 25% tariff, which could impact pricing and demand in the American market.

Eicher Motors and the Royal Enfield Challenge After Trump’s 25% Auto Tariff

Eicher Motors, the maker of Royal Enfield motorcycles, may also face headwinds due to the tariff. The US remains a key market for the company’s 650cc models, and higher import costs could affect sales volumes and pricing strategies in the region.

Samvardhana Motherson International Ltd, one of India’s leading auto component manufacturers, supplies parts to major American automakers, including Tesla and Ford. However, the company has a well-established manufacturing presence in both the US and Europe, which provides some insulation from the direct impact of the tariff. Firms that rely solely on exports are expected to bear the brunt of the new policy.

Trump’s 25% Auto Tariff: Wider Industry Implications

Sona Comstar, a key player in automotive systems and components, derives about 66% of its revenue from the US and European markets. To mitigate risks posed by trade disruptions, the company has been actively expanding into China, Japan, and South Korea. Sona BLW aims for these Eastern markets to contribute over 50% of its revenue within the next five years, thereby reducing dependency on the US and Europe.

Other Indian auto component makers with significant export exposure include Bharat Forge, Sansera Engineering Ltd, Suprajit Engineering, and Balkrishna Industries. The impact of the tariff will vary depending on each company’s level of reliance on exports versus local production in key markets.

In FY24, India exported auto components worth $21.2 billion, playing a crucial role in the global auto supply chain. The worldwide auto component market is valued at approximately $1.2 trillion, with the US and Europe being the largest importers. Shipments to these regions accounted for about 4.5% of total global trade.

Also Read: Trump Imposes 25% Tariff On Imported Autos, Aims To Generate $100 Billion In Tax Revenue