Shaun
US President Donald Trump has announced a 25 per cent tariff on overseas auto imports, which is expected to impact Indian companies such as Tata Motors, Eicher Motors, Sona BLW, and Samvardhana Motherson.
These firms export auto components to Europe, Japan, South Korea, and China, which supply vehicles to the United States.
Tata Motors does not have direct exports to the US, but its subsidiary Jaguar Land Rover (JLR) has a strong foothold in the American market.
According to JLR’s FY24 annual report, the US accounted for 22 per cent of its overall sales. In FY24, JLR sold nearly 400,000 vehicles worldwide, with the US being one of its top markets, the report added.
The company’s vehicles sold in the US are primarily manufactured in the UK and other international plants, which will now be subject to a 25 percent tariff.
Meanwhile, Eicher Motors, the maker of Royal Enfield motorcycles, could also feel the impact, as the US is an important market for its 650cc models.
As one of India’s leading auto component manufacturers, Samvardhana Motherson International Ltd has a strong footprint in both Europe and the US.
It supplies parts to major American automakers, including Tesla and Ford. However, with established manufacturing units in the US and Europe, the company is relatively shielded from the impact of import tariffs, unlike firms that rely solely on exports, the report added.
Sona Comstar manufactures automotive systems and components, including differential gears and starter motors. The company derives about 66 percent of its revenue from the US and European markets. To mitigate risks, Sona BLW has been diversifying its export base by expanding into China, Japan, and South Korea, aiming for these Eastern markets to contribute over 50 per cent of its revenue within five years.
Other key component makers with significant export exposure include Bharat Forge, Sansera Engineering Ltd, Suprajit Engineering, and Balkrishna Industries.
In the financial year 2024, India exported auto components worth $21.2 billion, contributing to the global auto component market, which stands at $1.2 trillion.
Shipments to the US and Europe, the world’s biggest importers of auto parts, made up approximately 4.5 per cent of the total global trade.
