Auto Stocks Slide on US Tariff Shock; Tata Motors, Bharat Forge Hit

Indian automobile manufacturers and auto component exporters faced a brutal selloff on April 4, with shares of leading players like Tata Motors and Bharat Forge crashing as much as 8–9 percent. The fresh bout of panic selling followed continued fallout from U.S. President Donald Trump’s reciprocal tariff regime announced earlier this week. The 25 percent import duty on automobiles coming into the United States, part of a broader protectionist trade policy, has jolted investor confidence across export-linked industries, especially in the automobile sector, where Indian companies have strong market dependencies on American demand.

The Nifty Auto index was down nearly 3 percent in early trade, extending the losses seen since April 2. Several auto stocks, both global exporters and domestically focused players, were dragged down amid concerns over waning price competitiveness, diminishing margins, and broader global trade frictions.

JLR’s Exposure to U.S. Market Sparks Concern for Tata Motors

Tata Motors was among the worst-hit large-cap stocks in the session, with shares declining over 5 percent amid deepening worries over the implications of the U.S. tariffs on its UK-based luxury car subsidiary Jaguar Land Rover (JLR). The American market constitutes approximately 23 percent of JLR’s global vehicle sales, accounting for a substantial portion of its revenue mix.

According to Tata Motors’ FY24 disclosures, JLR sold more than 400,000 units globally, and over one-fifth of these units were shipped to the U.S. With import tariffs spiking by 25 percent, JLR will either have to absorb the cost increases, thereby squeezing its margins, or raise retail prices, which could potentially suppress demand in one of its key markets.

Nirav Karkera, Head of Research at Fisdom, said, “The U.S. alone contributed over a fifth of JLR’s total revenue last year, making it a crucial market. With limited options to maintain margins and meet prior guidance, JLR will likely resort to price hikes and cost efficiencies. However, these strategies won’t yield immediate results, and a near-term hit to both revenue and profitability is expected.”

Highlights:

• Tata Motors shares dropped over 5% on April 4

• JLR’s FY24 global sales crossed 400,000 units, with 23% sold in the U.S.

• Price hikes or cost reductions likely but may not immediately offset the tariff hit

Bharat Forge Hit by Tariffs and Weak Class 8 Truck Orders in North America

Auto component heavyweight Bharat Forge also saw its stock nosedive, plunging nearly 9 percent to hit a one-month low. The company’s high reliance on exports to the United States—particularly in the commercial vehicle segment—made it highly vulnerable to the sudden tariff shock. Chairman and Managing Director Baba Kalyani had earlier confirmed that the U.S. accounts for about 20 percent of the company’s total exports, a figure that now appears at risk.

Adding to the pressure, recent Class 8 truck orders in North America—an important revenue generator for Bharat Forge—have seen a consistent decline. ACT Research, as cited by CNBC-TV18, reported a fall in Class 8 truck orders for the fourth consecutive month, indicating softening demand in the heavy-duty truck market even before the impact of tariffs.

Highlights:

• Bharat Forge stock fell nearly 9%, touching a one-month low

• U.S. comprises ~20% of the company’s export revenues

• Class 8 truck orders in North America down for four straight months

Auto Ancillaries, Domestic OEMs Also Face Contagion from Export-Led Stress

The tariff shock extended its impact beyond direct exporters to domestic-centric original equipment manufacturers (OEMs) and component makers. Shares of Maruti Suzuki and Mahindra & Mahindra declined by over 2 percent each, as broader investor sentiment soured on the entire auto sector. Analysts note that even firms with limited U.S. exposure can suffer from reduced investor interest when trade risks rise sharply across the board.

Auto ancillaries, especially those with export footprints, faced steeper losses. Sona BLW Precision and Samvardhana Motherson, two component suppliers with significant international exposure, dropped over 5 percent each. Export-driven sectors have become especially vulnerable, as currency volatility, logistical disruptions, and shifting trade terms begin to reshape global supply chains.

Vaibhav Porwal, Co-Founder of Dezerv, remarked, “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. In this market environment, gains will likely be concentrated in select stocks rather than broadly distributed, making careful stock selection and active management strategies more effective than passive approaches.”

Highlights:

• Maruti Suzuki and M&M down over 2% each despite low direct U.S. exposure

• Sona BLW Precision and Samvardhana Motherson fell over 5%

• Market volatility shifting preference toward active fund management over index investing

Trump’s “Reciprocal Tariff” Push Rattles Indian Exporters

The latest round of tariffs is part of U.S. President Donald Trump’s broader “reciprocal trade” campaign, designed to address what he describes as longstanding imbalances in global trade. During his announcement on April 2, which he branded as ‘Liberation Day’, Trump imposed a blanket 26 percent tariff on Indian goods and singled out key export items including automobiles, textiles, and gems & jewellery for specific scrutiny.

In a statement to the media, Trump asserted, “Toyota sells one million foreign-made automobiles in the US and General Motors almost sells none. Ford sells very little. None of our companies are allowed to go into other countries.” He further added, “In many cases, the friend is worse than foe in terms of trade. Such horrendous imbalances have devastated our industrial base, and put our national security at risk.”

His comments underline a growing shift toward protectionist economics and nationalist supply chain strategies, where even strategic trade partners like India are not exempt from aggressive tariff actions. Industry leaders and policymakers in India are now scrambling to assess the long-term implications of the abrupt tariff escalation.

Highlights:

• Trump imposed 25% import tariff on automobiles as part of reciprocal trade policy

• President cited trade imbalances with countries like India and Japan

• Sectors like automobiles, textiles, and jewellery are primary targets of tariff scrutiny

Export Value at Stake: $6.8 Billion in Auto Trade Under Threat

Data from Tata Mutual Fund estimates that India exports nearly $6.8 billion worth of automobiles and auto components to the United States annually. The new tariff structure poses a direct threat to the price competitiveness of Indian manufacturers in one of the world’s largest auto markets. The added cost could prompt American buyers to shift preferences toward domestic or alternative suppliers, further hurting Indian players already dealing with slim margins and high capital intensity.

If the tariff regime sustains or expands, it could push Indian companies to realign their market strategies by focusing on Europe, Southeast Asia, and domestic consumption. However, such strategic shifts require time, capital, and logistical recalibration—resources that may not be readily available amid an uncertain macroeconomic backdrop.

Highlights:

• India’s annual auto and component exports to the U.S. valued at $6.8 billion

• Tariffs expected to erode competitiveness and reduce sales volumes

• Exporters may need to re-orient toward alternative geographies amid trade disruption