In a move poised to send ripples through the global automotive supply chain, US President Donald Trump has announced a 25 per cent tariff on overseas auto imports. The decision is expected to significantly impact Indian firms, including Tata Motors, Eicher Motors, Sona BLW, and Samvardhana Motherson, according to a report by MoneyControl.
Key Highlights:
Tata Motors: Indirect Hit via Jaguar Land Rover
While Tata Motors does not export vehicles directly to the United States, its subsidiary Jaguar Land Rover (JLR) is heavily reliant on the American market. According to JLR’s FY24 annual report, the US accounted for 22% of its global sales, making it one of the brand’s top-performing regions.
JLR sold nearly 400,000 vehicles worldwide in FY24, with a significant portion of its US-bound models manufactured in the UK and other overseas plants. These shipments will now face a 25% import duty, potentially affecting profit margins, pricing, and competitiveness in the US luxury vehicle market.
Other Indian Auto Companies on Alert
Several Indian auto and auto component manufacturers with global exposure are also expected to feel the heat of the new tariff policy.
Eicher Motors
- Maker of Royal Enfield motorcycles.
- US is a key export market, particularly for its 650cc models.
- Likely to face pressure on premium segment exports.
Samvardhana Motherson International Ltd
- Supplies components to major US automakers like Tesla and Ford.
- Has manufacturing units in the US and Europe, making it partially insulated from the tariff.
Sona BLW (Sona Comstar)
- Derives 66% of its revenue from the US and European markets.
- Manufactures high-precision systems such as differential gears and starter motors.
- Currently diversifying into China, Japan, and South Korea to reduce dependence on Western markets.
India’s Auto Component Exports: A Broader Impact
India exported $21.2 billion worth of auto components in FY24, with a notable share going to the US and Europe—regions that collectively contribute around 4.5% of the global $1.2 trillion auto parts trade.
Other notable Indian exporters with significant exposure to Western markets include:
- Bharat Forge
- Sansera Engineering Ltd
- Suprajit Engineering
- Balkrishna Industries
With Trump’s tariff announcement, these firms may need to re-evaluate their global trade strategies, including sourcing, pricing, and regional diversification.
Tata Motors and Indian Auto Sector Brace for Uncertainty
The US’s 25% tariff on imported vehicles could spell challenges for Tata Motors, especially for its Jaguar Land Rover operations. While firms like Samvardhana Motherson and Sona BLW may be better prepared due to diversified operations, the broader impact on India’s $21B auto component export economy remains a pressing concern.
As global trade tensions resurface, Indian automakers and component manufacturers will need to adopt proactive strategies to stay competitive and resilient in a rapidly shifting geopolitical landscape.
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