Tata Motors share price drops amid new U.S. trade tariffs
Tata Motors share price under pressure as U.S. hikes car import tariffs
Shares of Tata Motors declined nearly 3% on Thursday following the implementation of new U.S. tariffs on foreign-made automobiles.
The Mumbai-based automaker saw its stock price fall by 2.58% to ₹654.50 per share on the Bombay Stock Exchange (BSE), reflecting investor concerns over the impact of increased trade restrictions, reports Mint.
The tariffs, announced by the Trump administration on March 26, took effect at midnight on April 3. Under the new policy, the U.S. has imposed a 25% tariff on imported passenger vehicles, including sedans, SUVs, crossovers, minivans, cargo vans, and light trucks.
Additionally, nearly 150 critical auto parts, such as engines, transmissions, and powertrain components, will also be subject to tariffs, which are set to be fully implemented by May 3, 2025.
Impact on Tata Motors and JLR
Tata Motors, the parent company of British luxury automaker Jaguar Land Rover (JLR), is significantly exposed to the American market. Nearly one-third of JLR's global sales in 2024 were in the U.S., with 23% of its total 400,000 vehicles sold coming from that region.
These vehicles are primarily manufactured in the United Kingdom and exported to the U.S., making them vulnerable to the new tariff structure. Industry analysts believe that JLR may face increased costs, potentially leading to higher prices for consumers or pressure on profit margins.
"The U.S. has imposed 25% tariffs on imported cars, light trucks, and select auto parts sourced from outside North America. Further, almost 150 auto parts will face tariffs at a similar rate," said Arun Agarwal, Vice President of Fundamental Research - Automobiles at Kotak Securities.
Broader Market Effects
The tariff hikes also had a ripple effect across the Indian automotive sector. Bharat Forge's shares fell by 4.6% to ₹1,099.40 per share, while Balkrishna Industries declined 4.3% to ₹2,453.90. Other notable declines included Sona BLW Precision Forgings (-3.6%), Samvardhana Motherson International (-3.3%), Bajaj Auto (-2.87%), and TVS Motor Co (-2.08%).
As global trade tensions escalate, investors will be closely watching how automakers adapt to the new regulatory environment, with potential negotiations or alternative supply chain adjustments on the horizon.
Additionally, the global economy faces rising uncertainty as U.S. President Donald Trump imposes broad import tariffs, including a 10% minimum on all goods and 20% on EU imports. China, Canada, and Taiwan have condemned the move, with Beijing vowing retaliation.
