Tata Motors Share Price Fall 6%, Near 52-Week Low – Here’s Why

Tata Motors share price declined 5.77% to ₹615.50 on the BSE, approaching its 52-week low of ₹606.20, recorded on March 3. The company’s market capitalisation fell to ₹2.26 lakh crore. Tata Motors has a one-year beta of 1.2, indicating high volatility.

On April 4, automakers and auto component company shares continued to slide, dragging the Nifty Auto index down nearly 3%. The decline followed the US government’s decision to impose a 25% tariff on imported automobiles, impacting global trade prospects.

Recent Decline in Tata Motors’ Stock

• Down 34% in the last 6 months 
• Dropped 22% in the past 3 months 
• Lost 39% in the past year

Impact on Indian Exports

A report by Tata Mutual Fund highlighted that India exports automobiles and auto components worth $6.8 billion to the US. The new tariff will reduce price competitiveness, especially for ancillary companies that rely on exports.

Tata Motors Takes a Major Hit

Tata Motors’ stock dropped over 5% as its subsidiary, Jaguar Land Rover (JLR), has significant exposure to the US market. JLR sold more than 400,000 vehicles globally in FY24, with about 23% of sales coming from the US.

Industry experts suggest JLR may have to raise prices or cut costs to maintain profit margins. However, these strategies may not deliver immediate results, leading to a near-term impact on revenue and profitability.

Broader Market Selloff

The market downturn affected not just export-heavy companies but also domestic players. Maruti Suzuki and Mahindra & Mahindra shares fell by over 2% each. Auto component makers like Sona BLW Precision and Samvardhana Motherson saw a steeper drop of more than 5%.

US Defends Tariff Decision

Announcing the new tariffs on April 2, US President Donald Trump pointed to high tariffs imposed by trading partners. He argued that foreign carmakers like Toyota benefit significantly in the US market, while American automakers face restrictions abroad.

“In many cases, our friends in trade have been worse than our foes. These imbalances have hurt our industries and put our national security at risk,” Trump said.

Conclusion

With rising trade tensions and high exposure to the US, Tata Motors and auto component makers face near-term challenges, requiring strategic adjustments to sustain growth.

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