Samvardhana Motherson Share Price Jumps 8% In 5 Days; Should You Invest in Auto Stocks Post US-UK Trade Deal?

Auto sector investors are closely watching the latest US-UK trade deal and its implications for Indian auto component suppliers like Samvardhana Motherson and automakers such as Tata Motors. Samavardhana shares are under pressure today but have been trading positively in the last few trading sessions. In one week alone the stocks have rallied about 8%.

Samvardhana Motherson Share Price

Samvardhana Motherson's share price this morning opened 2% lower at Rs. 137 per share and later on climbed slightly; however, the stocks are down 1.89% at Rs. 138.80 at the time of writing. The stock saw selling pressure after global headlines pointed to a significant shift in US-UK trade, especially in the automobile sector. Previously the stocks in the last five days have gained 6% and jumped 22% in one month. In the last three years Samvardhana Mother saw its share grow 75%.

The announcement of a fresh trade agreement between the United States and the United Kingdom has raised concerns about potential cost increases and export uncertainties.

Samvardhana Motherson Share Price Target

"Samvardhana Motherson is expected to grow faster than the global auto industry by tapping into key automotive megatrends and continuing its expansion through acquisitions. Although the stock has seen a sharp decline over the past six months due to concerns around the global auto outlook, its current valuation appears attractive." said Ambit Institutional equities.

The brokerage firm has set a target price of Rs. 162 apiece for Samavardhana mother's son shares, implying about a 20% upside from the current market price.

US-UK Trade Deal: What It Means for Auto Stocks

The US-UK trade deal, announced late Thursday Indian time by US President Donald Trump, outlined new tariff structures for automotive imports. The blanket 10% tariff on up to 1 lakh imported vehicles from the UK remains in place, while any additional units will attract a steep 25% tariff.

Prior to April 2, the US import duty on passenger vehicles stood at just 2.5%. This recent move effectively increases the baseline import cost, with even the revised 10% rate significantly higher than what it was historically.

Samvardhana Motherson, being a major auto component supplier to global OEMs including JLR, could feel the heat if export volumes from the UK decline. Any disruption in the global supply chain or shift in manufacturing preferences due to higher tariffs could weigh on the company's top-line growth.

Impact on Other Auto Stocks Like Tata Motors

The revised tariff structure is likely to weigh on British automaker Jaguar Land Rover (JLR), which is a wholly owned subsidiary of Tata Motors. Notably, JLR had paused its US shipments in April amid tariff uncertainties. The automaker had exported 1.02 lakh vehicles to the US in 2024 alone, a figure that hovers near the threshold for the 10% tariff limit.

Tata Motors shares today jumped about 4% this morning, which is the 4th consecutive session of gains. Market participants are now awaiting further clarity on the final terms of the deal and any tariff exemptions that may occur.

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