As Canada and Mexico readied for a 25% tariff implementation on Tuesday, with China facing an additional 10%, Honda emerged as one of the first companies to cave, scrapping plans to produce the upcoming Civic in Mexico in favor of Indiana, as reported.
The renowned Japanese automaker initially intended to assemble the next-gen Civic in Guanajuato, Mexico, commencing in November 2027. Now, Honda has decided to produce the new Civic in Indiana, kicking off in May 2028, with an anticipated output of approximately 210,000 vehicles annually, a source disclosed. Japan’s largest vehicle manufacturer had previously aimed to manufacture the next iteration of the Civic in Guanajuato, Mexico, according to three people.
Production was expected to begin in November 2027, according to one informant. Mexico had been selected due to escalating costs making manufacturing difficult in Indiana and Canada, noted one of the individuals. The company now aims to create the new Civic model in Indiana from May 2028, targeting an expected yearly output nearing 210,000 vehicles, as mentioned by a source.
All individuals spoke on condition of anonymity pending public announcement of the information. A Honda representative refrained from commenting on the Civic production adjustments, stating the business would continue to assess demand and the market landscape while considering “optimal manufacturing and allocation globally.”
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Over the years, Mexico has served as a low-cost production hub for Japanese and other global automakers. Honda exports about 80% of its Mexican production to the U.S., which is the second-largest automotive market after China.
Chief Operating Officer Shinji Aoyama cautioned in November that Honda would need to consider relocating manufacturing.
if the U.S. were to enforce permanent tariffs on imported vehicles. Honda’s case underscores how potentially disruptive U.S. tariffs could be for industries unable to significantly shift production plans swiftly due to heavy investments and diverse production lines for varying markets. Last year, Honda sold roughly 1.4 million vehicles in the U.S., including Acura models. It moved over 240,000 Civics, both gasoline and hybrid variants, making it Honda’s second-best seller in the American market after the CR-V.
Civic sales in the U.S., renowned for their affordability, surged by 21% year-on-year last year, as reported by company data. About 40% of Honda’s sales in the U.S. are sourced from imports from Mexico and Canada.
Additionally, Honda exports approximately 60,000 vehicles manufactured in the U.S. to Mexico or Canada, meaning that if those nations introduce retaliatory tariffs, Honda could encounter further cost hikes.