As of March 27, 9:58 AM, Tata Motors share price was trading at Rs 670.60, down 5.25% from its previous close of Rs 707.95. The stock opened at Rs 673.95 and hit an intraday low of Rs 661.35, with a high of Rs 675. The decline came after news of US President Donald Trump’s decision to impose a 25% tariff on imported automobiles, raising concerns over Jaguar Land Rover’s (JLR) sales in the US market.
Why is Tata Motors’ Share Price Falling?
Tata Motors, the parent company of Jaguar Land Rover (JLR), has been impacted by trade policy changes in the United States. The US is one of the most significant markets for JLR, contributing nearly 22% of its global sales in FY24. The newly announced 25% tariff on non-US manufactured vehicles, set to take effect on April 2, has raised concerns that JLR’s sales could decline due to higher costs passed on to American consumers.
Key reasons for the decline in Tata Motors’ stock:
- US Tariff on Auto Imports – The new 25% import tariff is expected to increase the price of JLR vehicles in the US, potentially reducing demand.
- Market Reaction to Uncertainty – Investors are reacting negatively to the uncertainty surrounding how Tata Motors will offset the potential losses from the tariff.
- Stock Performance History – Tata Motors had already declined 40% from its July 2024 peak of Rs 1,179, making investors cautious amid ongoing global macroeconomic risks.
- Analyst Concerns – While some brokerages remain optimistic about JLR’s ability to mitigate the impact, others, like Nuvama, have issued a ‘Reduce’ call due to potential macroeconomic uncertainties.
What is Required for Tata Motors to Recover?
For Tata Motors to regain investor confidence and stabilize its stock price, the following strategies may be essential:
- Price Adjustments – JLR may need to implement strategic price hikes to offset the tariff impact without significantly reducing demand.
- Cost Management – Tata Motors must focus on operational efficiencies, cutting costs in other areas to balance out the increased tariff burden.
- Diversification of Market Strategy – Expanding sales in other regions, such as Europe and China, could help mitigate losses from the US market.
- Government Negotiations – Engaging with policymakers for possible trade relief or incentives could ease financial pressure.
- Electric Vehicle (EV) Growth – As India’s largest four-wheeler EV player, Tata Motors could leverage its EV segment to drive future growth and offset traditional ICE vehicle market fluctuations.