Tata Motors Faces Tumult as US Tariff Hikes Hit Hard

Shares of Tata Motors fell by nearly 3% following new US tariffs on foreign-made automobiles. The tariffs, effective from April 3, affect imported passenger vehicles and vital auto parts. The US market is significant for Tata's Jaguar Land Rover, with 23% of its sales from there.

Shares of Tata Motors suffered a nearly 3% decline on Thursday as the United States tariff hike on foreign-made automobiles took effect. The administration under former President Donald Trump announced these tariffs on March 26, and they became effective from midnight on April 3.

The new tariffs target imported passenger vehicles—including sedans, SUVs, and light trucks—as well as crucial auto parts. Tata Motors, the parent company of Jaguar Land Rover (JLR), is significantly affected due to JLR's substantial market presence in the United States, contributing to almost one-third of its sales in 2024.

The tariffs, which will extend to 150 auto parts, are part of a broader US strategy to impose 25% tariffs on vehicles and components sourced outside North America. Industry analysts warn that suppliers may face margin pressures, depending in part on upcoming US-India trade negotiations.

(With inputs from agencies.)