U.S. President Donald Trump has confirmed that a 25% tariff will be imposed on Mexico and Canada starting today. Amid growing uncertainty and the looming threat of a trade war, Honda has decided to move the production of its new Civic from Mexico to Indiana, U.S. This move raises the question: will other automobile manufacturers follow suit and shift production out of Mexico to avoid the 25% tariffs? We believe this could be just the beginning.
Civic sense: From Mexico to the U.S.A
A Reuters report has confirmed that Japanese automaker Honda will shift the production of its next-generation Civic to the U.S. instead of Mexico, starting in 2028. This decision comes in response to the new tariffs. The Indiana plant is expected to produce 210,000 units annually. Initially, Honda had planned to begin Civic production in 2027 at its Guanajuato facility in Mexico, but that timeline has now been delayed by six months.
Mexico has been the manufacturing hub for automobile companies due to low-cost production. According to the Reuters report, 80% of the output from Honda’s Mexico plant is for the U.S. market. Last year, during the Honda-Nissan merger talks, the former indicated that it could shift its manufacturing facilities to the U.S. permanently due to the new tariffs.
Reuters did try to reach out to the Honda spokesperson who declined to comment. According to Car and Driver, a Honda representative issued a statement saying, “Honda has made no such announcement and will not comment on this report. The Honda Civic has been made in our Indiana Auto Plant since the facility opened in 2008 based on our longstanding approach to build products close to the customer. We have the flexibility to produce products in each region based on customer needs and market conditions.”
