- Nitin Sindhu VY
Key Points:
- 25% tariff imposed on imported cars and auto components by the US.
- Indian companies impacted: Tata Motors (via JLR), Eicher Motors, and Samvardhana Motherson.
- JLR sales at risk—US contributes 22% of its global sales.
- Royal Enfield motorcycles may become costlier in the US.
- Auto component makers like Bharat Forge, Sansera Engineering could face challenges.
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How Indian Automakers Are Affected
1. Tata Motors & Jaguar Land Rover (JLR)
- JLR, owned by Tata Motors, sells a significant number of vehicles in the US.
- US accounts for 22% of JLR’s global sales (~400,000 vehicles sold worldwide in FY24).
- Most JLR vehicles sold in the US are imported from UK/EU factories, making them subject to the new 25% import duty.
- Impact: Higher prices for American buyers, potentially reducing demand.
2. Eicher Motors (Royal Enfield)
- US is a key market for Royal Enfield’s 650cc motorcycles.
- New tariffs could increase prices, making them less competitive.
3. Samvardhana Motherson & Other Auto Component Makers
- Samvardhana Motherson supplies parts to Tesla, Ford, and European automakers.
- Some insulation due to local US/EU plants, but exports may still be hit.
- Other Indian suppliers at risk:
- Bharat Forge
- Sansera Engineering
- Suprajit Engineering
- Balkrishna Industries
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What This Means for the Indian Auto Sector
- Higher costs for US-bound exports, leading to reduced margins or lower demand.
- Possible shift in production—companies may set up US factories to avoid tariffs.
- Short-term pain, but long-term adjustments could mitigate risks.
The full impact will depend on how these companies adapt to the new trade policy.
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