- Nitin Sindhu VY

Key Points:

- 25% tariff imposed on imported cars and auto components by the US.  

- Indian companies impacted: Tata Motors (via JLR), Eicher Motors, and Samvardhana Motherson. 
 
- JLR sales at risk—US contributes 22% of its global sales.  

- Royal Enfield motorcycles may become costlier in the US.  

- Auto component makers like Bharat Forge, Sansera Engineering could face challenges.  

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How Indian Automakers Are Affected

1. Tata Motors & Jaguar Land Rover (JLR)

- JLR, owned by Tata Motors, sells a significant number of vehicles in the US.  

- US accounts for 22% of JLR’s global sales (~400,000 vehicles sold worldwide in FY24).  

- Most JLR vehicles sold in the US are imported from UK/EU factories, making them subject to the new 25% import duty.

- Impact: Higher prices for American buyers, potentially reducing demand.  

2. Eicher Motors (Royal Enfield)
- US is a key market for Royal Enfield’s 650cc motorcycles.  

- New tariffs could increase prices, making them less competitive.  

3. Samvardhana Motherson & Other Auto Component Makers

- Samvardhana Motherson supplies parts to Tesla, Ford, and European automakers.  

- Some insulation due to local US/EU plants, but exports may still be hit.  

- Other Indian suppliers at risk:
  - Bharat Forge
  - Sansera Engineering
  - Suprajit Engineering
  - Balkrishna Industries

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What This Means for the Indian Auto Sector

- Higher costs for US-bound exports, leading to reduced margins or lower demand.  

- Possible shift in production—companies may set up US factories to avoid tariffs.  

- Short-term pain, but long-term adjustments could mitigate risks.  

The full impact will depend on how these companies adapt to the new trade policy.