Trump Tariff: Uncertainty looms over JLR, Royal Enfield, auto component industry with 25% tariff

The 25% tariff by the Trump administration has rattled the global automotive industry. At home, the auto component industry is looking at an uncertain future as the 25% tariff takes effect beginning April 3. The impact could be as large as price hikes and slow demand. 
 
US President Donald Trump imposed a 25% tariff on all foreign-made vehicles from April 3. The 25% tariff on auto components is set to be levied beginning May 3. 
 
India’s automobile exports to the US are minimal. 
 
"It is to be noted that autos are not covered in this order since they are already subject to Section 232 tariffs at 25%, announced earlier in President Trump’s order on March 26, 2025.  We don't expect any significant impact on the Indian Automobile industry since there are limited exports to the US, but we will continue to monitor the situation," says Rajesh Menon, Director General, SIAM.
 
Amongst automakers, Tata Motors-backed Jaguar Land Rover and Eicher Motors- backed Royal Enfield identify the US as one of their key markets. 
 
“North America contributes 32% of JLR’s volumes in 9MFY25 (up from 25% YoY).The 25% tariff could force price hikes or cost-cutting measures to maintain margins. Given its premium positioning, JLR may have some resilience, but near-term volume pressure is expected,” says Sanket Kelaskar, Analyst - Institutional Equity - Ashika Group.
 
For Royal Enfield, the tariffs could lead to slow exports, according to Kelaskar. “Royal Enfield holds 8% of the U.S. mid-size motorcycle market. The Super Meteor 650 ($7,999) is still cheaper than the Harley-Davidson Iron 883 ($9,999), providing a pricing cushion. However, the tariff could moderate export growth in the U.S,” says Kelaskar. 
 
Notably, the domestic auto component manufacturers are looking at far more implications than original equipment manufacturers. In FY24, the US accounted for 27% of the total auto component exports. India exported auto components worth $6.2 billion. “Auto components may be subject to tariffs from May 3, but confirmation is still pending. If imposed, this could impact major Indian suppliers like Samvardhana Motherson, Sona BLW, and Bharat Forge. The U.S. manufacturing wage is ~10x that of India, making it difficult to shift production completely, so a revision of the tariffs remains a possibility,” says Kelaskar. 
 
Auto component manufacturers are awaiting a detailed list of components included in the tariff. 
 
According to Mrunmayee Jogalekar, Auto and FMCG Research Analyst, Asit C Mehta Investment Interrmediates Ltd, “for the Indian auto component industry, which derives around 30% of its revenue from exports, with 30% of that coming from the US, this could result in a potential hit on sales or profit margins.”