Shares of Indian car companies, auto component makers and tyre players jumped sharply during the April 15 session, after US President Trump signalled a potential exemption for automotive sector grappling with high import tariffs.
Trump said in a statement that he’s ‘looking to help some of the car companies’ that are in the process of shifting production back to the US from countries like Mexico and Canada. While details were scarce, the comment sparked speculation that an exemption from the current 25 percent auto import tariffs may be on the cards.
“They’re switching to parts that were made in Canada, Mexico and other places, and they need a little bit of time because they’re going to make them here,” Trump said, suggesting a window of relief may be given to firm's mid-transition.
At 12 pm, the Nifty Auto index, constituting auto and auto ancillary players, soared over three percent, with gains led by Tata Motors, M&M, Samvardhana Motherson, and Sona BLW Precision Forgings, jumping up to eight percent intraday.
Tyre stocks also faced a similar fate. Shares of CEAT, Apollo Tyres, Balkrishna Industries and JK Tyres & Industries surged between 1-5 percent in trade.
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Trump’s comment comes amid rising scrutiny of the US trade relationship with its NAFTA partners, where 30 to 60 percent of vehicles sold in the US are assembled. General Motors and Toyota, for instance, produce about 30 to 40 percent of their US-sold vehicles in Mexico and Canada, while Volkswagen relies on those countries for 60 percent of its US offerings.
That exposure has ripple effects across the global auto supply chain. Indian auto ancillary firms with ties to North American auto production — like Samvardhana Motherson and Sona BLW — are closely watched in this context.
Mexico contributes about 4 percent to Samvardhana Motherson’s revenue, while for Sona BLW, the exposure is around 2 percent. Tata Motors’ JLR unit, meanwhile, has temporarily halted shipments to the US for April to navigate the ongoing tariff regime.
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