Auto Industry’s New Playbook: Local Roots, Global Ambitions Amid Tariff Storm

Automotive part makers are quickly adjusting to international trade disruptions caused by the 2025 wave of tariffs, such as the US's 25% tariff on imported vehicles and parts. The industry, which recorded a strong 14% growth in FY24, currently expects a more subdued 7–9% growth in FY25 as firms adjust strategies to mitigate growing costs and supply chain gaps.

 

Market leaders such as Kinetic Engineering and Samvardhana Motherson International are going all out on localisation, with Kinetic already procuring more than 97% of its parts locally. This move not only protects them from tariff fluctuations but also enhances resilience in the face of global uncertainties. Meanwhile, Indian suppliers such as Sona BLW Precision Forgings are diversifying export markets aggressively, moving into China, Japan, and South Korea to de-risk dependence on US and European markets.

 

The new tariffs have compelled automakers and suppliers to reconsider supply chains, invest in local production, and consider direct sales channels. Though the US market is still crucial, the attention is turning to creating long-term partnerships, managing risk, and designing flexible products to ride out continuing trade tensions.

 

Source: Business Standard, News18, Copperberg