US-EU Trade Deal: Tata Motors, Bharat Forge, Sona BLW Seen To Benefit
The US tariffs on cars from the EU will be charged at 15% compared to a steep 27.5% currently.
A trade deal between the United States and the European Union that standardises tariffs will benefit Indian auto and auto ancillary companies like Tata Motors Ltd. and Sona BLW Precision Forgings Ltd., with a presence in the two markets.
As per the deal announced on Sunday, the EU will face 15% tariffs on most of its exports while it has agreed to purchase vast amounts of US energy and military equipment, besides investing $600 billion in the country.
The US tariffs on cars from the EU will be charged at 15% compared to a steep 27.5% currently. The deal comes ahead of President Donald Trump's reciprocal tariff deadline of Aug. 1.
Notably, the US is the world's second-largest auto market, behind China. India follows at number three, ahead of Japan.
Stocks In Focus: Tata Motors, Sona BLW, Bharat Forge
Tata Motors
The Jaguar Land Rover has a plant in EU-member Slovakia and hence will face a lower export tariff of 15%. The US is a key market for the premium Tata Motors brand, as it contributes a 33% share in JLR's total volumes. Many of these cars are produced in the Slovakia plant.
Besides, the tariffs on UK car imports have been reduced to 10% after a US-UK trade deal.
Samvardhana Motherson
The company is a supplier to original equipment manufacturers (OEMs) in Germany and Mexico that export to America. The exposure to the US market is 6-7%.
Sona BLW Precision Forgings
The US contributes 43% to the overall topline of the company. The consolidated revenue increased 11% year-on-year to Rs 3,546 crore in the previous financial year.
Sona BLW manufactures precision forged bevel gears, differential assemblies, starter motors, and traction motors for automotive applications at its nine manufacturing plants, three in Gurugram and one each in Manesar, Pune, Chennai, the US, Mexico, and China.
Bharat Forge
The company's US sales account for 35-40% of standalone exports. Bharat Forge is a manufacturer of automotive and industrial components, particularly known for its forging and metal-forming expertise. The Kalyani Group firm is a major auto component exporter from India and a key supplier to global automotive OEMs and Tier 1 companies.
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