How US Tariffs Sparked a Selloff in Indian Auto Stocks on April 4, 2025?

Market Performance

On April 4, 2025, shares of several automakers and auto component manufacturers experienced a notable decline, leading the Nifty Auto index to fall by nearly 3%. The selloff was driven by concerns following the imposition of a 25% reciprocal tariff on imported automobiles by the United States.

Main News

The United States recently announced a new 25% import tariff on automobiles, which has significantly impacted Indian exporters. India annually exports approximately $6.8 billion of automobiles and auto components to the US. The new tariff regime is expected to affect the price competitiveness of not only automakers but also their suppliers.

Company Details

Bharat Forge

• Share Price Movement: Declined by nearly 9%, reaching its lowest level in about a month.
• Market Exposure: The company has substantial exposure to the US market, particularly in the Class 8 truck segment.
• Industry Trend: According to data from ACT Research, orders for Class 8 trucks in North America have declined for the fourth consecutive month.

Tata Motors

• Share Price Movement: Fell over 5% on April 4.
• Subsidiary Performance: Jaguar Land Rover (JLR), the company's luxury vehicle arm, has considerable exposure to the US market.
• Sales Data:
  • Global Sales (FY24): Over 400,000 units
  • US Market Contribution: Approximately 23% of total sales
• Revenue: The US contributed over 20% to JLR's total revenue in FY24

Maruti Suzuki

• Share Price Movement: Fell over 2% in the trading session.
• Business Focus: Primarily focused on the domestic Indian market but affected by broader market sentiment.

Mahindra & Mahindra

• Share Price Movement: Declined by nearly 2%.

Sona BLW Precision & Samvardhana Motherson

• Share Price Movement: Both companies experienced a drop of over 5% in their respective share prices.
• Business Exposure: These companies are involved in auto components manufacturing, with significant exposure to export markets.

Summary

The Indian automotive sector witnessed a broad-based decline on April 4, 2025, following the United States' announcement of a 25% tariff on imported automobiles. This policy has raised concerns over export-driven revenue for Indian automakers and component suppliers. Companies with high exposure to the US market, such as Bharat Forge and Tata Motors (via Jaguar Land Rover), led the selloff. At the same time, domestic-focused firms also saw a spillover effect. The broader Nifty Auto index fell nearly 3% as investor sentiment remained cautious amid evolving global trade conditions.