- Currently 40% Civic sales in USA are imports via Canada & Mexico
- Honda will push 210k vehicles a year
- Decision made based on 25% Tariffs
Before yall dogs bark, keep in mind, Toyota has had factories in USA for years now; and has been successful. All vehicles sold in USA, should have been assembled, built, manufactured in the USA. Nonetheless, This is a SLOW job growth to the USA economy.
Honda has announced plans to build its next-generation Civic hybrid in Indiana, shifting production from Mexico in response to the U.S. administration’s proposed 25% tariffs on vehicles imported from Mexico and Canada. The move is expected to bring some economic benefits, though analysts caution that job growth will be slow.
Currently, 40% of Civic sales in the U.S. come from imports via Canada and Mexico. Honda’s decision is aimed at avoiding additional costs imposed by the tariffs, with an estimated annual production of 210,000 vehicles at the Indiana facility.
“Before critics jump to conclusions, it’s worth noting that Toyota has had factories in the U.S. for years and has been successful. Nonetheless, this shift represents slow job growth for the American economy.”
Honda’s Civic Production Shift: Timeline and Key Details
According to sources familiar with the matter, Honda had originally planned to produce the next-generation Civic in Guanajuato, Mexico, but the rising costs of production—coupled with the looming tariffs—prompted the shift to Indiana.
Key details of the new production plan include:
- Production Start: May 2028 (originally scheduled for November 2027).
- Annual Output: 210,000 units at full capacity.
- Tariff Mitigation: Honda may import from non-tariffed countries if Indiana’s production does not meet demand.
While Honda has not made an official announcement, three sources confirmed the decision, speaking on condition of anonymity.
A Honda spokesperson declined to comment on specific changes to the Civic production plan, stating:
“We will continue to evaluate demand and the business environment while considering optimal production and allocation globally.”
Impact of U.S. Tariffs on Honda and the Auto Industry
Honda, like other Japanese automakers, has historically relied on Mexico as a low-cost manufacturing hub. Around 80% of Honda’s Mexican production is exported to the U.S., making tariffs a major concern for the company.
Honda’s Chief Operating Officer, Shinji Aoyama, warned in November that the company would have to reevaluate production locations if the U.S. imposed permanent tariffs on imported vehicles.
“Honda’s case underscores how disruptive the U.S. tariffs could be for industries that cannot quickly alter production plans,” said an industry expert.
Honda sold 1.4 million cars and trucks in the U.S. last year, including 240,000 Civics, making it Honda’s second-best-selling model after the CR-V. Civic sales rose 21% year-over-year in 2023, highlighting the model’s importance in the U.S. market.
However, about 40% of Honda’s U.S. sales come from vehicles imported from Canada and Mexico. Additionally, Honda exports around 60,000 American-made vehicles to those countries. If Canada and Mexico impose retaliatory tariffs, Honda could face further cost increases.
As Honda adapts to the evolving trade policies, the long-term impact on U.S. jobs and the auto industry remains uncertain.
Sources:
Honda.com, 03/03/2025
Shinji Aoyama
Author: Ryan Bridglal, 03/03/2025