JLR’s US Halt Amid Trump Tariffs May Hit Tata Motors’ Share Price

The recent announcement of a 25% tariff by the US on automobile and component imports has put Tata Motors share price in the spotlight. Its British subsidiary, Jaguar Land Rover (JLR), has temporarily halted exports to the US, prompting investor concerns and affecting market sentiment.

Trump Tariffs Disrupt JLR Shipments

Starting from April 7, JLR will pause all exports to the US for one month. This decision is part of a short-term plan to adjust to the new trading terms set by the US government. The company shared in a statement, “As we work to address the new trading terms with our business partners, we are taking some short-term actions, including a shipment pause in April.”

This move comes at a critical time. JLR has a significant dependence on the US market. In FY24, 23% of its revenue and 26% of total wholesale volume came from the US. This exposure rose even further to 33% in the first nine months of FY25, showing how vital the US market has become for the automaker.

Tata Motors Share Price in Focus

Following the news, Tata Motors share price came into focus. As of April 8, 2025, at 12:20 PM, Tata Motors shares were trading at ₹589.70, up by 1.72%, after touching a day high of ₹606.60. However, with approximately 31% of JLR’s retail sales coming from the US, the newly imposed tariffs could negatively affect both sales volume and overall profitability going forward.

JLR’s US Growth Story Interrupted

Interestingly, JLR had been gaining ground in the US. Its sales rose 39% year-on-year in the first 11 months of FY25, and its market share among premium carmakers grew to 10.9% from 8.4% in FY24. However, with tariffs pushing up prices, demand could fall.

Nomura estimates the cost impact of the Trump tariffs at around $3,700 per vehicle, or about 8% of the average selling price. Even if half of this is passed on to customers through a 4% price hike, it could lead to a demand drop of around 8%, or nearly 1 million vehicles in a market of 16 million new car sales.

Conclusion

While the US has been a lower-margin market for JLR, it remains a critical part of the company’s global strategy. The pause in exports, if prolonged, could significantly weigh on future earnings. Tata Motors may need to reassess its production and pricing strategies to remain competitive amid changing trade policies.

For now, all eyes are on how Tata Motors and JLR plan to navigate these headwinds. Investors will be closely watching updates and the Tata Motors share price, which will likely reflect the ongoing uncertainty in the weeks to come.

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