Shares of auto and auto parts manufacturers jumped into sixth gear on April 15 as investors brewed hopes of tariff exemptions for auto imports after Trump’s latest comments.
Indian auto exports to the US, valued at nearly $6.8 billion, faced the risk of losing price competitiveness amid Trump’s proposed 25% import tariffs
Shares of auto and auto parts manufacturers jumped into sixth gear on April 15 as investors brewed hopes of tariff exemptions for auto imports after Trump’s latest comments.
Trump stated that he is “looking to help some of the car companies” currently in the process of relocating production to the US from countries such as Mexico and Canada. While the US President did not offer an specifics on how he plans to help the industry, his remarks sparked speculation that a potential exemption from the existing 25% auto import tariffs could be under the wraps.
“They’re shifting to parts that were previously made in Canada, Mexico, and elsewhere, and they need a bit of time as they start manufacturing them here,” Trump said, implying that firms in mid-transition may be granted temporary relief.
Rejoiced by the development, investors began lapping up shares of domestic auto and auto component makers that have been hammered in recent times. On the basis of that, shares of Tata Motors, M&M, Samvardhana Motherson, Bharat Forge and Sona BLW Precision Forgings emerged as the biggest gainers, soaring 5-8%.
Other auto stocks like Bajaj Auto, Balkrishna Industries, TVS Motor also rose around 4% each. Meanwhile, stellar gains across all auto names also lifted the Nifty Auto index 3.4% higher.
Indian auto exports to the US amount to nearly $6.8bn and were under the threat of eroding price competitiveness due to Trump’s 25% tariffs.
Among Indian companies with significant exposure to the US market, Bharat Forge derives around 20% of its total exports from the region. Tata Motors, through its subsidiary Jaguar Land Rover (JLR), also maintains a strong presence in the US. JLR sold over 400,000 units globally in FY24, with around 23% of those sales coming from the US market alone.
Production in Mexico accounts for around 4% of Samvardhana Motherson’s revenue, while Sona BLW has a more limited exposure at around 2%. Meanwhile, Tata Motors’ Jaguar Land Rover (JLR) unit has temporarily suspended shipments to the US for April as it navigates the prevailing tariff regime.
Moreover, it wasn’t just Indian carmakers and auto parts manufacturers that rejoiced in hopes of tariff exemptions. Shares of Japanese and South Korean automakers also echoed similar sentiments.
Shares of car companies in Japan such as Toyota Motor, Honda Motor and Suzuki Motor Corp , along with South Korean carmakers Hyundai Motor and its affiliate Kia Corp were also buzzing in trade. The gains were strong enough to make the auto sector the biggest contributor in Japan’s broader Topix Index.