Honda Shifts Civic Production to Indiana to Avoid U.S. Tariffs on Mexico

In response to U.S. President Donald Trump’s proposed 25% tariffs on goods from Mexico and Canada, Honda is shifting production of its next-generation Civic hybrid from Mexico to Indiana. This move highlights how automakers are adapting to potential trade disruptions and increased manufacturing costs.

Honda had originally planned to produce the Civic in Guanajuato, Mexico, but rising costs and tariff risks led the company to change course. Production in Indiana is now set to begin in May 2028, with an estimated annual output of 210,000 vehicles. However, Honda may import from non-tariffed countries if demand exceeds Indiana’s capacity.

Mexico has long been a cost-effective manufacturing hub, with 80% of Honda’s Mexican-made vehicles exported to the U.S.. Honda executives have warned that permanent tariffs could force long-term production shifts, increasing costs and disrupting supply chains.

With 40% of Honda’s U.S. sales relying on imports from Mexico and Canada, the potential for retaliatory tariffs could further impact operations. This shift signals major changes for global automakers, as companies reevaluate manufacturing strategies amid evolving trade policies.

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