Bharat Forge, Balkrishna Industries tank upto 6% on Trump's 25% auto tariff

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Auto stocks fall on Trump's tariffs: The auto sector saw major declines, with several stocks dropping as much as 6 per cent during intraday trading on the National Stock Exchange (NSE). 

 

The Nifty Auto index, which tracks the performance of auto stocks, dropped 1.46 per cent, to hit an intraday low of 21,095 points. 

 

The sharp decline in auto stocks followed the imposition of a 25 per cent tariff on all cars and auto parts imported into the United States (US) that are not manufactured domestically. This tariff, which took effect on April 3, 2025, had a direct impact on Indian auto manufacturers and exporters, many of whom ship vehicles and components to the US.

 

Bharat Forge was one of the hardest-hit stocks, seeing a drop of 6.1 per cent to ₹1,082.55. Other top losers included Balkrishna Industries, which fell 4.48 per cent to ₹2,452.05, and Samvardhana Motherson International, which decreased 3.4 per cent to ₹127.73. 

 

Bajaj Auto’s shares dropped 2.88 per cent to ₹7,840, while Tata Motors saw a decline of 2.61 per cent to ₹654.30. TVS Motor, Ashok Leyland, and Eicher Motors also witnessed losses, falling 2.19 per cent, 2.04 per cent, and 1.68 per cent, respectively, to ₹2,441.25, ₹204.51, and ₹5,265. 

 

Other stocks such as Tube Investment, Exide Industries, Bosch, and M&M also faced declines, ranging from 1.5 per cent to 1.55 per cent, with share prices at ₹2,691.25, ₹366, ₹27,588, and ₹2,600.25, respectively. 

 

Hero MotoCorp, MRF, and Maruti Suzuki saw smaller drops, with their shares falling 1.27 per cent, 1.16 per cent, and 0.89 per cent, to ₹3,735.65, ₹1,13,800, and ₹11,611.05, respectively.

 

The 25 per cent tariff on imported automobiles and parts has raised concerns about increased prices and reduced demand for Indian automotive products in the US.

 

Domestic brokerage firm Anand Rathi warned that this tariff would negatively impact Indian manufacturers, particularly auto component exporters. 

 

“The US plans to impose a 25 per cent tariff on imported automobiles and parts, which will impact Indian manufacturers. This could lead to increased prices and reduced demand for Indian automotive products in the US,” analysts at Anand Rathi said, in a note dated April 2, 2025. 

According to Arun Agarwal, VP, fundamental research, automobiles, Kotak Securities, US has imposed 25 per cent tariffs on imported cars, light trucks and select auto parts sourced from outside of North America. Further, almost 150 auto parts will face tariffs at similar rate. This move could result into increase in car prices in the US and cost pressure for component suppliers.  "In the event of car prices going up, the US car market may witness a steep volume decline and that can impact revenue for component players supplying parts to the US car/light truck industry. Further, margins of suppliers may come under pressure as they may need to partly absorb cost pressures. We believe there will be some impact, which the suppliers will have to bear, leading to negative implications on margins. Having said that, it needs to be seen on how higher tariffs are absorbed across the supply chain that includes customers, OEMs and suppliers. The extent of impact for Indian players will also depend on the US-India bilateral agreement over the next few months," Agarwal added.

 

By 11:04 AM, the Nifty Auto index had made a recovery, trading 0.54 per cent lower at 21,293.65 levels.