Shares of Samvardhana Motherson and Sona BLW fell over 2% on March 4, 2025, as US President Donald Trump’s 25% tariffs on Mexico and Canada came into effect. The tariffs have raised concerns about their impact on India’s auto component exports, particularly for companies with significant exposure to the Mexican market.

Mexico’s Role in India’s Auto Component Exports

India’s auto component exports to Mexico account for 3% of the country’s total $21.2 billion in exports, translating to around $656 million, according to a recent Elara Securities report. These exports primarily include metallurgical components such as forgings and castings, making companies like Samvardhana Motherson and Sona BLW particularly vulnerable to the tariff hike.

Impact on Samvardhana Motherson and Sona BLW

• Samvardhana Motherson:

  • Mexico contributes 4% of its total revenue.
  • The impact of tariffs will depend on how automakers adjust their production strategies to mitigate higher vehicle costs in the US.
  • The company has already seen a 14% drop in its stock price over the last month, largely due to tariff concerns.

• Sona BLW:

  • Mexico accounts for around 2% of its total revenue.
  • While most of its value addition happens in India, Mexico primarily serves as an assembly hub.
  • Analysts at Elara Securities suggest that if OEMs move production to the US, Sona BLW could directly supply these facilities instead, reducing the impact of tariffs.
  • The stock has lost 5% over the last month, reflecting investor concerns.

What’s Next for Auto Component Stocks?

The extent of damage from these tariffs will depend on how global automakers react. If OEMs shift production from Mexico to the US, it could benefit Indian suppliers like Sona BLW, which can directly supply parts to American plants.

However, in the short term, higher costs and supply chain disruptions could weigh on auto component stocks. With India’s growing role in global manufacturing, industry experts believe companies may diversify export markets to offset potential losses from the US-Mexico trade tensions.

While the market remains cautious, long-term growth prospects for Indian auto component firms remain strong, backed by India’s expanding EV ecosystem, government incentives, and global supply chain diversification trends.

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