M&M, Maruti Suzuki Share Price Drop on European Import Tariff Cuts: Stock Market Today Update

Shares of India's leading automakers, including M&M and Maruti Suzuki, tumbled on January 27 after reports emerged of a sharp reduction in import tariffs for European cars. Investors reacted quickly, driving declines across the Nifty Auto Index, highlighting market sensitivity to trade policy changes.

Market Performance Snapshot

• M&M shares slipped as much as 5.1%, hitting their lowest level since August 2025.
• Maruti Suzuki India shares fell around 2.95%.
• Tata Motors Passenger Vehicles recorded a 2% decline.
• Nifty Auto Index traded 1.2% lower at 26,480 by 10:15 am, marking it the biggest sectoral loser for the day.

The selloff reflects the market digesting potential shifts in trade policy that could open Indian roads to more European imports.

Main News: European Import Tariffs Set for Sharp Cut

India is reportedly planning to slash tariffs on car imports from the European Union from as high as 110% to 40%, under a trade deal nearing finalization. The tariff cut could be implemented as early as January 27, according to sources cited by Reuters.

The initial reduction will target cars with an import price exceeding €15,000 ($17,739). The move is expected to make European automakers like Volkswagen, Renault, Stellantis, Mercedes-Benz, and BMW more competitive in India.

Prime Minister Narendra Modi called the agreement “the mother of all deals” during the inauguration of India Energy Week, highlighting the deal’s significance for global trade. Modi emphasized that the pact covers 25% of global GDP and one-third of global trade, marking a milestone in India-EU economic relations.

Company Impact: M&M, Maruti Suzuki, and the Indian Auto Market

• The Indian auto market sells approximately 4.4 million vehicles annually, with homegrown players M&M, Tata Motors, and Maruti Suzuki holding a dominant share.
• European brands currently account for less than 4% of the market, mostly in the luxury segment.
• The tariff cuts are expected to primarily benefit European luxury brands, while mass-market players like Maruti Suzuki and M&M may see only limited impact.
• Luxury vehicles constitute about 1% of the Indian auto market, meaning the tariff changes have minimal effect on mid-level and entry-level cars from domestic manufacturers.

While some premium customers may migrate to European brands known for engineering, safety, and performance, the majority of Indian car buyers are likely to continue favoring established local brands.

Key Takeaways

• M&M shares down 5.1%; Maruti Suzuki down 2.95%; Tata Motors PV down 2%.
• Nifty Auto Index loses 1.2%, the largest sectoral decline on January 27.
• Tariffs on European car imports to drop from 110% to 40% for selected models.
• Luxury vehicle segment may see moderate shift toward European brands.
• Mass-market players like Maruti Suzuki and M&M remain largely insulated.

Summary

The stock market reacted sharply to India’s proposed trade agreement with the EU, reflecting investor caution over policy-driven changes. M&M and Maruti Suzuki share price declines were the key highlights, though the broader impact is limited to luxury and premium cars.

The market now watches closely as the deal awaits formal ratification by the Indian Union Cabinet and the EU Parliament, with potential implementation next year. For investors and auto enthusiasts, this development underscores the growing integration of India with global markets, especially in the automotive sector.

Source: Moneycontrol