Honda to Manufacture Next-Generation Civic in the USA to Evade Tariffs

Honda is planning to produce its upcoming Civic Hybrid model domestically within the United States. Currently assembled at the Ontario, Canada plant, a recent report indicates that the intended move to Mexico has been canceled. Instead, the new Civic Hybrid will be manufactured at Honda’s Indiana facility starting May 2028.

Sources familiar with the situation informed Reuters that the decision to keep production in the U.S. is aimed at avoiding the 25 percent tariffs imposed by former President Donald Trump on imports from Mexico and Canada. Initially, Honda had scheduled the next-generation Civic Hybrid production to begin at its Guanajuato, Mexico plant in November 2027.

Production Capacity and Tariff Implications

According to Reuters sources, the Indiana plant is projected to produce 210,000 Civic Hybrids annually. Should demand exceed this capacity, Honda may need to import additional units from countries not subject to these tariffs. However, this strategy could be challenging, especially with Trump’s proposal to implement a 25 percent duty on all car imports effective April 2, alongside existing tariffs on Mexico and Canada.

Automakers’ Strategic Shifts

The looming threat of tariffs has led several automakers to consider relocating their production facilities to the United States. Reports suggest that Mercedes-Benz might move production of its C- or E-Class models to Alabama, while there are rumors that Porsche and Audi could also establish manufacturing operations in the U.S. Despite these speculations, automakers are likely developing contingency plans to respond to the administration’s policies.

Ford CEO Jim Farley recently stated that the 25 percent tariffs on goods from Mexico and Canada, set to take effect on March 4, could cause unprecedented disruption in the U.S. industry. He warned that these tariffs could lead to increased costs, consumer price hikes, and a significant reduction in profits.

Source: Reuters