Investing.com-- Indian automobile stocks fell on Thursday after Trump imposed 25% tariffs on all auto imports, with Tata Motors and Sona, which have increased U.S. exposure when compared to their peers, declining the most.
Tata Motors Ltd (NSE:TAMO) (NYSE:TTM), whose Jaguar Land Rover unit sells luxury vehicles in the U.S., slid nearly 5% in late-morning trade, while Sona BLW Precision Forgings (NSE:SONB), which supplies auto components to several major U.S. manufacturers including Ford and Tesla (NASDAQ:TSLA), fell 4%. Samvardhana Motherson International Ltd (NSE:SAMD), which also exports auto parts to the U.S., shed nearly 3%.
Tesla CEO Elon Musk said the tariffs would “significantly” impact Tesla, given that it imports components for several models.
Eicher Motors Ltd. (NSE:EICH), whose Royal Enfield brand sells some motorcycles in the U.S., fell 0.5%, while Hyundai Motor (OTC:HYMTF) India Ltd (NSE:HYUN) shed 0.1%.
Indian automakers with chiefly domestic exposure were resilient, with Mahindra & Mahindra Ltd. (NSE:MAHM) falling 0.3%, while Maruti Suzuki India Ltd. (NSE:MRTI) rose 0.6%. Broader Indian stocks also rose, with the Nifty 50 index adding 0.4%.
Losses in Tata and Sona came after Trump imposed 25% tariffs on all non-American-made cars sold in the U.S., with his tariffs also extending into auto components.
The tariffs, which will take effect from April 2, are intended to encourage brands into building more manufacturing plants in the U.S.
But in the interim, the tariffs are expected to drive up car costs in the U.S., which could further erode demand for new vehicles. International automakers such as Toyota (NYSE:TM), Hyundai Motors, and Honda (NYSE:HMC), all clocked steep stock losses on Thursday after Trump’s announcement.
Trump is also set to impose a host of reciprocal tariffs on at least 15 countries on April 2.