In the financial year 2024 (FY24), India exported auto components worth $21.2 billion, playing a role in the $1.2 trillion global auto component market. However, recent changes in US trade policy may impact these exports.

US President Donald Trump has introduced a 25 percent tariff on auto imports from overseas. This could affect Indian auto companies like Tata Motors, Eicher Motors, Sona BLW, and Samvardhana Motherson, which export auto parts to Europe, Japan, South Korea, and China. These companies supply vehicles to the US, making them part of the global trade chain now subject to higher taxes.

Jaguar Land Rover’s sales in the US

Tata Motors itself doesn’t export directly to the US, but its luxury car brand, Jaguar Land Rover (JLR), has a strong market there. According to JLR’s annual report for FY24, the US accounted for 22 percent of its global sales. The company sold about 400,000 vehicles worldwide during this period, with the US being one of its top buyers.

JLR’s vehicles for the US market are mostly built in the UK and at other international factories. Now, because of the new tariff, these imported cars will become more expensive in the US.

Impact on Other Companies

Eicher Motors, which makes Royal Enfield motorcycles, could also be affected by the tariff. Its 650cc bikes are popular in the US, making it an important market for the company.

Samvardhana Motherson: A leading supplier with local factories

Samvardhana Motherson International Ltd, a top auto component maker in India, has a large presence in both Europe and the US. It supplies parts to big American car manufacturers like Tesla and Ford. However, because the company already has factories in the US and Europe, it may not be as badly affected as firms that depend fully on exports from India.

Sona BLW diversifies its markets

Sona Comstar, another major auto component company, makes systems and parts like differential gears and starter motors. The company gets about 66 percent of its revenue from the US and European markets. To reduce risks, Sona BLW is expanding its business to other countries like China, Japan, and South Korea. Its goal is for these Asian markets to contribute more than half of its revenue within the next five years.

Other companies with export exposure

Other Indian companies that may feel the impact of the US tariff include Bharat Forge, Sansera Engineering Ltd, Suprajit Engineering, and Balkrishna Industries, all of which have major exports to the US and Europe.

India’s auto component exports play an important role in global trade. In FY24, exports to the US and Europe made up around 4.5 percent of total global auto part trade.

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