Manufacturers with facilities in Mexico, a significant exporter of heavy trucks to the United States, as well as Canada, Japan, and Germany, are anticipated to be impacted by the tariffs, including Volvo Group and Stellantis. Additionally, the US is Daimler’s biggest export destination for trucks.
Trump Imposes 25% Tariff
In an effort to protect domestic commercial vehicle manufacturers, US President Trump recently imposed a tariff on imported heavy trucks. This will hurt some of the world’s top truck manufacturers, including the Volvo Group, Daimler Truck, Toyota Group’s Isuzu, and the Volkswagen Group, among others. Many of these companies have Indian auto component manufacturers as OEM partners or vendors.
Heavy-duty vehicles coming into the United States will be subject to a 25% tax starting next month. President Trump wrote without providing any other information, stating that “all Medium and Heavy-Duty Trucks entering into the United States from foreign Countries would be Tariffed at the Rate of 25% beginning November 1st, 2025.” Trump said last month that he plans to “defend our Great Heavy Truck Manufacturers from unfair outside competition” by enacting the tax.
Indian automakers supply or collaborate with some international truck manufacturers who export to the US, even though they do not directly export medium and heavy trucks to the US.
While Samvardhana Motherson and Sona Comstar are exhibiting mixed tendencies, Bharat Forge’s shares have rebounded after falling more than 1% in early trading on October 7.
Indian OEMs having exposure to the US and Europe
Numerous Indian automakers are involved in international networks that supply parts like forgings, wiring harnesses, steering and brakes, or powertrain components for trucks sold all over the world, including Volvo and Daimler. There may be some effect on supplier demand if American clients decide to pass on the cost of tariffs on imported CVs, though official word from the OEM players is still pending.
India’s biggest exporter of auto parts, Bharat Forge, earned Rs 4,728 crore in export income in FY25. The European economic recovery, which was slower in the previous fiscal year, has a direct effect on its commercial vehicles. As a result, its FY25 revenue from the CV business was Rs 2,015.2 crore, a 4.6% year-over-year decline.
Bharat Forge US Export Risk
Following the June quarter results, Baba Kalyani, CMD of Bharat Forge, said, “Given the recent tariff decision by the US government and changes to emission legislation in North America, we are apprehensive on the forecast for the US export business for the rest of the fiscal.”
“Considering our position in the overall cycle and our worldwide exposure, FY26 is probably going to be a difficult time. In order to lessen the burden of operational debt, we are concentrating on seizing opportunities in industries and regions that are comparatively untouched while also optimizing costs,” Baba Kalyani said.
Despite stagnant Class 8 truck market volumes, Bharat Forge’s North American CV business grew in FY25. However, there is now even more uncertainty as a consequence of the United States of America’s recent modifications to its trade policies. According to the company’s July annual report, they are projected to intensify US inflationary pressures, which will drive down total volumes in the CV and PV industries.
Motherson Faces Global Uncertainty
In addition to being an OEM for US-based manufacturers like Ford, Stellantis, and other American EV manufacturers, Samvardhana Motherson is a supplier to the Daimler Group in Europe. Throughout FY25, the company’s partnerships in Europe grew, providing battery cables, engine harnesses, cabin wiring, and fuse boxes for trucks, buses, and farm equipment. Samvardhana Motherson had landed deals for fuel-cell electric cars and “commercial, off-highway, and recreational vehicle sectors” in North America.
Europe saw its worst decline in FY25, with a 5.9% drop in light vehicle output, which Motherson recently said was a result of a “recalibration of EV strategy” by key OEMs due to softening demand. Samvardhana Motherson said earlier this year that “the rate of recovery remains modest given the background of geo-political tensions and uncertainties regarding tariff related actions.” The recent shift in the position on EV-friendly legislation has further increased market uncertainty in the United States. In the meanwhile, Canada has passed laws aiming to sell all vehicles with zero emissions by 2035.
Brokerage Perspective
In a recent note earlier this month, Elara Capital stated that Motherson’s most vulnerable clients are in Europe. According to Volkswagen, Mercedes, Porsche, and Audi’s recent guideline decrease, this may have a “ripple impact on suppliers like Motherson.” Based on Q4FY25 and Q1FY26, Elara has a sell rating on SMIL with a target price of Rs 83 per share, citing little room for margin expansion.
Slow Lane: America’s Truck Manufacturers
Chinese truck registrations increased by 5.3% in the first half of 2025 as Beijing bolstered the industry with scrappage incentives and new energy policies, while American truck manufacturing has been struggling due to supply chain concerns and apprehension over economic uncertainty.
According to statistics, European truck exports to the US had already started to decline earlier this year. According to data from the European Auto Manufacturers Association, exports of automobiles made in the EU to the US dropped 13.6% to Euro 17.3 billion in the first half of 2025. Nevertheless, over 45% of the EU’s total automotive export value came from the US and the UK combined.
The Reasons Behind the Tariff
In April 2025, the US government opened an investigation on the import of large vehicles under Section 232 of the Trade Expansion Act. The inquiry established the foundation for imposing import duties on items deemed essential to national security.
Aiming to promote American production and support American companies, the tax on imported vehicles comes after import duties on steel and aluminum. Commercial trucks utilized in the logistics or construction industries, however, may become more expensive due to the levies.
What Comes Next
Manufacturers with facilities in Mexico, a significant exporter of heavy trucks to the United States, as well as Canada, Japan, and Germany, are anticipated to be impacted by the tariffs, including Volvo Group and Stellantis. It is unclear if there will be any talks about carving out exemptions, since the tariffs have a direct effect on some of America’s allies. The biggest export market for Daimler’s trucks is the United States.
To reverse any commercial damage, it is also unclear whether European manufacturers or Indian OEM suppliers decide to expand exports to other countries or localize more from America. Volvo claimed to import other parts into the US and use 60–70% local parts in its trucks.