Tata Motors Stock In Focus On May 9: Trump Cuts Reciprocal Tariff On Cars To 10% For UK; JLR Big Winner

In major good news for automobile companies in the United Kingdom, the 47th US President, Donald Trump, has cut import tax to 10% on cars produced by them. The new development in tariffs is part of the US-UK trade deal on May 9.

Tata Group-backed automobile flagship company Tata Motors will be in focus on May 9. Tata Motors-backed JLR is a UK-based company and expected to benefit big time from US-UK trade deal.

Through his Social Truth account, Trump said, "Today is an incredible day for America as we deliver our first Fair, Open, and Reciprocal Trade Deal - Something our past Presidents never cared about. Together with our strong Ally, the United Kingdom, we have reached the first, historic Trade Deal since Liberation Day."

Among many sectors that received relief is the automobile. Trump's government announced a cut in reciprocal tariffs to 10%. This is brought down by 17.5% from its earlier reciprocal tariff of 27.5% on UK-based carmakers. However, there is a condition! The new tariff is applicable only on a quota of 100,000 vehicles.

IMAGE SOURCE: TRUTH SOCIAL

Why Tata Motors Share Price Will Be In Focus On May 9?

The reason why Tata Motors will be in focus is because its luxury car brand, Jaguar Land Rover (JLR), is headquartered and based in the UK. JLR has a significant market presence in the USA.

Following the imposition of a 25% additional reciprocal tariff on foreign-made cars, JLR paused its shipment in April to the USA. Trump's reciprocal tariff made it mandatory for foreign carmakers such as BMW, JLR, Toyota, Honda and more, to pay an extra 25% tariff on the existing tax because they do not have a manufacturing facility in the USA. This was expected to impact automakers globally as sales volumes were predicted to fall along with a surge in prices, which would eventually take a toll on earnings. Tata Motors and its JLR also felt the heat of the tariff.

When Trump's 25% was in the picture, global brokerage CLSA had predicted that it would push JLR's volumes down by at least 14% YoY for FY26, along with the discontinuation of JLR models. This could impact Tata Motors' EBIT margins, lowering them by 7% in FY26.

Hence, a reduction in tariff to 10% comes as a major relief for both JLR and Tata Motors.

As per the latest global sales data for Q4FY25 by JLR, the luxury carmaker's wholesale volumes stood at 111,413 units (excluding the Chery Jaguar Land Rover China JV) in the fourth quarter, registering a growth of 6.7% from Q3 FY25 and up 1.1% year-on-year. Compared to the prior year, wholesale volumes for the fourth quarter were higher in North America (14.4%) and Europe (10.9%), flat in the UK (0.8%), and lower in China (-29.4%) and overseas (-8.1%).

For the full year ended 31 March 2025, wholesale volumes of 400,898 and retail sales of 428,854 were flat at -0.1% and -0.7%, respectively, compared to the prior year. In addition, JLR achieved its net debt zero target, ending the financial year net cash positive, a key Reimagine strategy target, the data said.

Tata Motors Share Price:

After market hours of May 8, Tata Motors' share price stood at Rs 681.90, up marginally on BSE with a market cap of over Rs 2.51 lakh crore. In a week, this auto heavyweight stock has climbed nearly 5%.

Jaguar Land Rover, part of Tata Motors since 2008, is Britain's largest automotive manufacturer, which designs, manufactures, and sells some of the world's best-known premium cars.

JLR has set a roadmap to reduce emissions across operations and value chains by 2030 through approved, science-based targets. Electrification is central to this strategy, and before the end of the decade, JLR's Range Rover, Discovery, and Defender collections will each have a pure electric model, while Jaguar will be entirely electric, as per the Tata Motors website.