Bharat Forge, Tata Motors, other auto stocks tumble up to 9%, extending tariff-led rout – ET Auto

Indian automakers’ shares tumbled due to the US imposing a 25per cent import duty on automobiles.

“This move could result in an increase in car prices in the U.S. and cost pressure for component suppliers.”

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Shares of Indian automakers skidded sharply on Friday, extending a tariff-driven selloff triggered by Trump administration’s 25per cent reciprocal import duty on automobiles. The Nifty Auto index fell nearly 3per cent, with shares of Bharat Forge plunging as much as 9per cent.Bharat Forge led the declines, sliding to its lowest level in nearly a month, weighed down by its heavy exposure to the US market. The company’s Chairman and Managing Director, Baba Kalyani, recently noted that the US accounts for almost 20per cent of its total exports, raising concerns about a potential revenue hit due to the new tariffs. Bharat Forge supplies Class 8 truck components, a segment with a strong export base in the US.Tata Motors also bore the brunt of the selloff, with shares down over 6per cent. The company’s UK-based subsidiary, Jaguar Land Rover, is expected to face a significant impact from the tariffs, as the U.S. accounted for about 23per cent of JLR’s global sales of over 4 lakh units in FY24.

The selling pressure spread to domestically focused automakers as well. Shares of Maruti Suzuki dropped over 2per cent, while Mahindra & Mahindra fell also nearly 2per cent. Auto component makers were similarly affected, with shares of Sona BLW Precision and Samvardhana Motherson both down more than 5per cent.

“U.S. has imposed 25per cent tariffs on imported cars, light trucks and select auto parts sourced from outside of North America. Further, almost 150 auto parts will face tariffs at a similar rate,” said Arun Agarwal, VP, Fundamental Research – Automobiles at Kotak Securities. “This move could result in an increase in car prices in the U.S. and cost pressure for component suppliers.”Agarwal added that if car prices rise, the US market could see a steep volume decline, which would impact revenues for component suppliers and potentially squeeze margins, especially if suppliers are forced to absorb part of the increased costs.While Jefferies noted that Indian auto and component exports were already impacted by a 25per cent tariff imposed in March, the brokerage warned that companies with significant US exposure will continue to feel the pain.Vaibhav Porwal, Co-Founder of Dezerv, said, “Export-driven sectors like Information Technology and auto components face significant challenges as they are directly exposed to tariff impacts and broader global trade friction.” He added that in this environment, market gains would likely be concentrated in select stocks, favouring active stock selection strategies.