Honda Relocates Civic Hybrid Production to Indiana Amid Tariffs

Honda will produce its next-generation Civic hybrid in Indiana instead of Mexico, responding to proposed 25% US tariffs on imports from Mexico and Canada, sources revealed. 

Originally, Honda planned to manufacture the new Civic model in Guanajuato, Mexico, with production set to begin in November 2027. The decision to move production to Indiana, where it will start in May 2028, targets an annual output of 210,000 units. Mexico was initially selected due to its cost advantages over Indiana and Canada.

A source suggested that if Indiana’s production fails to meet demand, Honda may explore importing vehicles from non-tariffed countries. While a company spokesperson declined to discuss specific changes, they emphasized Honda’s commitment to assessing global demand and market conditions to optimize production.

Adjusting production plans is particularly challenging for manufacturers with intricate supply chains and regional investments. In November, Chief Operating Officer Shinji Aoyama cautioned that Honda might reconsider its production strategies if permanent tariffs on imported vehicles were implemented.

Mexico has served as a key manufacturing hub for global automakers due to its competitive costs. Approximately 80% of Honda’s Mexican production is exported to the United States. With about 40% of Honda’s US sales relying on vehicles produced in Mexico and Canada, the company is especially exposed to potential cost increases under the proposed tariffs.

In 2023, Honda sold 1.4 million vehicles in the United States, including Acura models. The Civic remains a flagship product, with over 240,000 units sold last year, making it the second-best-selling Honda vehicle after the CR-V. Civic sales surged by 21% compared to the previous year.