US President Donald Trump has announced a 25% tariff on overseas auto imports, a move that is set to disrupt the global automotive supply chain and significantly impact Indian companies such as Tata Motors, Eicher Motors, Sona BLW, and Samvardhana Motherson.
These firms export key auto components to Europe, Japan, South Korea, and China, where vehicles are manufactured and then shipped to the United States. With the new tariff in place, the cost of vehicles imported into the US will rise, affecting automakers dependent on Indian-made parts, MoneyControl reported.
Tata Motors, though it doesn’t directly export to the US, faces a major setback as its subsidiary Jaguar Land Rover (JLR) relies heavily on the American market. According to JLR’s FY24 annual report, the US accounted for 22% of its global sales, with nearly 400,000 vehicles sold worldwide. Since JLR’s vehicles are primarily manufactured in the UK, they now fall under the 25% import tariff, potentially reducing sales in one of its largest markets.
Another major player, Eicher Motors, could also feel the heat, as the US is a key market for its Royal Enfield 650cc motorcycles. Higher tariffs could increase costs and reduce demand for these premium bikes.
Meanwhile, Samvardhana Motherson International Ltd, a leading auto component manufacturer, supplies parts to Tesla, Ford, and other American automakers. However, with manufacturing units in the US and Europe, the company is partially shielded from the impact, unlike firms that solely rely on exports.
Sona Comstar, which derives 66% of its revenue from the US and Europe, may face challenges but has been diversifying into China, Japan, and South Korea to reduce dependence on Western markets. The company aims for these Eastern markets to contribute over 50% of its revenue within five years.
Other major Indian firms with high exposure to exports, including Bharat Forge, Sansera Engineering, Suprajit Engineering, and Balkrishna Industries, could also see disruptions in their business.
In FY24, India exported $21.2 billion worth of auto components, contributing to the $1.2 trillion global auto component market. With shipments to the US and Europe making up 4.5% of global trade, Trump’s new tariffs pose a serious challenge to India’s automotive exports, potentially reshaping global supply chains and trade relationships.
