Samvardhana Motherson, Sona BLW: Auto ancillary stocks fall up to 3%; Trump's 50% tariff to hurt sector, say experts

On August 6, the US announced an additional 25% tariff on all Indian imports, on top of an existing 25% duty, taking the total to 50% from August 27.

Following the announcements, shares of many sectors, including auto component makers, slipped into the red. Industry body ACMA (The Automotive Component Manufacturers Association of India) said the decision to impose high tariffs on Indian goods by the US presents near-term challenges for the auto component makers, underscoring the importance of enhancing the sector's competitiveness and exploring new and diversified markets.

"The recent decision by the US to impose higher and additional tariffs on certain imports from India, including auto components, underscores the shifting landscape of global trade," ACMA President Shradha Suri Marwah said in a statement.

While this development presents near-term headwinds for Indian exporters, "it also underscores the importance of enhancing our sector's competitiveness, strengthening value addition, and exploring new and diversified markets," Marwah added.

The US is a significant trade partner of the Indian auto components industry.

In FY 2024-25, it accounted for 27% of the $22.9 billion in auto component exports from India and 7% of the $22.4 billion in imports of auto components into India.

ACMA is confident that the long-standing and strategic trade relationship between India and the US will serve as a strong foundation for continued dialogue and resolution, Marwah noted.

In FY2025, the combined turnover of the auto component industry stood at $80.2 billion, with $22.9 billion in exports and a trade surplus of over $450 million.

EY India Partner & Automotive Tax Leader Saurabh Agarwal stated the recent imposition of higher US tariffs presents a significant, albeit anticipated, challenge for Indian auto component manufacturers.

While a 25% duty was already in effect for the sector since May 3, 2025, the additional reciprocal 25% tariff effective August 2025 is not to apply to the majority of the automotive sector (as the majority of the automotive sector is excluded from reciprocal tariffs).

However, even the initial 25% duty imposed on the automotive sector by the US fundamentally alters the sector's competitive landscape for US exports in the short term.

"This means we need to quickly adjust our plans to protect our strong export growth, especially since the US was one of our biggest markets for auto parts in FY2025," Agarwal noted.

How shares are performing

At the time of writing this article, Samvardhana Motherson shares were trading 2.62% lower at ₹92.85 apiece on the NSE, while Sandhar Technologies was down 2% at ₹451.95. Sona BLW Precision Forgings was trading over 3% lower at ₹432.15 on the NSE.