US Tariff Hikes Impact Tata Motors and Indian Auto Sector

Tata Motors shares dropped nearly 3% following tariff hikes on foreign-made autos by the US. New tariffs will affect imported vehicles and auto parts, impacting exports from companies like Tata Motors' JLR. The tariff changes led to price declines in shares of other Indian auto companies and raised concerns over profit margins.

Shares of Tata Motors dropped nearly 3% on Thursday following the implementation of tariff hikes on foreign-made automobiles announced by the Trump administration, effective April 3. The tariffs specifically target imported passenger vehicles and key auto parts.

This move has profound implications for Tata Motors' subsidiary Jaguar Land Rover (JLR), as the United States constitutes about one-third of its 2024 sales. The tariffs are expected to challenge profits significantly, as JLR exports heavily from its UK facilities to the US.

The tariff increase has also affected other Indian automotive players, leading to declines in shares of Bharat Forge, Balkrishna Industries, and Sona BLW Precision Forgings. With US-India auto-component trade dynamics under evaluation, the sector could face tighter margins and adjusted strategies.

(With inputs from agencies.)