Auto stocks saw significant declines on Thursday, March 27, 2025, with Tata Motors leading the fall, plunging over 6% after U.S. President Donald Trump announced the imposition of a 25% tariff on auto imports starting in April. Shares of Tata Motors dropped 6.58%, closing at ₹661.35 on the Bombay Stock Exchange (BSE).
Other auto companies also faced downward pressure, with Ashok Leyland falling by 4.60%, Mahindra & Mahindra dipping 1.70%, Bajaj Auto slipping 1.48%, and Apollo Tyres losing 1.41%. The BSE auto index was down by 0.86%, settling at 48,286.47.
Auto components and equipment firms also saw losses, with Samvardhana Motherson International declining by 7.59%, Sona BLW Precision Forgings falling 6.69%, Bharat Forge slipping 4.28%, and ASK Automotive Ltd dropping by 1.82%.
The negative reaction was largely attributed to Trump's decision to impose a 25% duty on all car imports to the U.S., a move expected to significantly impact Tata Motors, which exports a large portion of its Jaguar Land Rover (JLR) vehicles to the U.S. V.K. Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, noted that Tata Motors would be directly affected by these tariffs, given its reliance on U.S. exports for its luxury car brand.
In addition to the auto tariffs, Trump also announced that further 25% tariffs would be levied on major automotive parts, including engines, transmissions, and electrical components, starting in May. These tariffs are expected to add more pressure to auto-related stocks and the broader industry.
Despite the challenges in the auto sector, the broader equity market showed resilience. The BSE Sensex rose 427.54 points to reach 77,716.04, and the NSE Nifty climbed 135.30 points to settle at 23,622.15, recovering from early losses.
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