Honda will manufacture the next-generation Civic in Indiana instead of Mexico to avoid U.S. tariffs, sources say.
Production is now set to begin in May 2028, delayed from the original November 2027 timeline.
Honda expects to produce approximately 210,000 Civics annually in Indiana.
Honda has decided to produce its next-generation Civic hybrid in Indiana rather than Mexico to avoid potential U.S. tariffs, according to three people familiar with the matter. The decision comes as automakers adjust to recently minted 25% tariffs on goods imported from Mexico and Canada under U.S. trade policy changes.
2025 Honda Civic Hybrid Review: Great Car, But Where’s the Efficiency?
Initially, Honda had planned to manufacture the new Civic in Guanajuato, Mexico, starting in November 2027. However, rising costs and the tariffs have led to a change in strategy, with production now scheduled to begin in Indiana in May 2028. The company expects to produce approximately 210,000 Civics annually at the Indiana plant.
A Honda spokesperson declined to comment on production changes but stated that the company continually evaluates global production and allocation strategies based on market conditions.
Honda’s decision is a direct result of the broader impact of U.S. tariffs on automakers. Mexico has long been a lower-cost manufacturing hub, with Honda exporting about 80% of its Mexican-made vehicles to the United States. The company also imports about 40% of the vehicles it sells in the U.S. from Mexico and Canada.
In November, Honda’s Chief Operating Officer Shinji Aoyama warned that permanent tariffs on imported vehicles could force the company to shift production. Additionally, now that Mexico and Canada are imposing retaliatory tariffs, Honda could face further cost increases, as it exports around 60,000 U.S.-built cars to those markets annually.
The Civic is one of Honda’s top-selling models in the United States. In 2023, the company sold more than 240,000 Civics, including gasoline and hybrid variants, making it Honda’s second best-selling vehicle in the U.S. after the CR-V and the best-selling car in Canada. Civic sales rose 21% year-over-year in 2023, reflecting strong consumer demand.
Honda’s production shift is one of the first major moves by a Japanese automaker in response to the U.S. trade policy changes.
Source: Reuters
