Shares of major automobile companies Mahindra & Mahindra (M&M), Hyundai Motor India, and Maruti Suzuki fell on Tuesday as investors reacted to news about the proposed India-European Union (EU) trade agreement.
During the trading session, M&M shares dropped by about 4 per cent to Rs 3,399.45. Hyundai Motor India shares fell 3.33 per cent to Rs 2,189.15, while Maruti Suzuki shares were down 1.90 per cent.
Experts said the fall in stock prices is linked to possible changes in import duties under the India-EU trade deal. Dharmesh Kant, Head of Equity Research at Cholamandalam Securities, explained that import duties on vehicles may be reduced from 110 per cent to 40 per cent, and later to 10 per cent. However, the final details are still not clear.
He added that the lower duty may apply only to vehicles priced above 15,000 euros. In India, this price range is around Rs 20–25 lakh. Mahindra & Mahindra has many SUVs in this segment, so the company could be affected the most.
Kant also said it is important to know whether the duty cuts will apply to petrol and diesel vehicles or electric vehicles. This difference will help understand how much the profits of these companies may be impacted.