Trump's tariff impact: Auto stocks slide; Tata Motors, Motherson, and Bharat Forge top losers

Shares of automobile firms tumbled on Thursday, April 3, as US President Donald Trump said earlier announced tariffs on auto imports will take effect from Thursday.

The President has announced a 25% tariff on all foreign-made auto parts.

While announcing the tariff, Trump said, “None of our companies are allowed to go into other countries. That’s why, effective at midnight, we will impose a 25% tariff on all foreign-made automobiles.”

During the opening session, the NIFTY auto sector had tumbled over 1%. At the time of writing this article, it was trading 0.87% lower.

The automobile sector contributes around 3% of India’s total exports to the US. According to commerce ministry data, passenger car exports from India to the US in 2024 amounted to just $8.9 million.

As Trump announced the tariffs, he held up a chart that showed the tariffs that countries such as India, China, the UK, and the European Union charge, along with the reciprocal tariffs that these countries will now have to pay.

“India, very, very tough. Very, very tough. They charge us 52%. You have to understand, we charged them almost nothing for years and years and decades, and it was only seven years ago, when I came in, that we started with China,” Trump further said on Wednesday.

President Trump announced a 26% "discounted reciprocal tariff" on India, which was sharply lower than India's competing nations like China, Vietnam, Cambodia, Bangladesh, Sri Lanka and Thailand.

Shares of Samvardhana Motherson, India’s largest auto parts supplier, also tanked 2.56% to ₹128.84 apiece on the National Stock Exchange.

The biggest laggards in the NIFTY Auto sector were Balkrishna Industries (-3.04%), Bharat Forge (-2.42%), Bajaj-Auto (-2.37%), Tube Investments of India (-1.64%) and TVS Motors (-0.84%).

Eicher Motors (0.54%) and Maruti Suzuki (0.17%) were the only stocks trading in green in the sector.