Honda Shifts Next-Gen Civic Production from Mexico to Indiana Amid Tariff Concerns

Honda relocates next-generation Civic production from Mexico to Indiana to avoid potential 25% tariffs. Discover how this decision impacts the auto industry.

Japanese automaker Honda is adjusting its production strategy, shifting assembly of the next-generation Honda Civic from Mexico to Indiana, USA. This decision comes in response to potential 25% tariffs on imported cars from Mexico and Canada, which could take effect if Donald Trump is re-elected. Production in Indiana is expected to begin in May 2028, with an estimated annual output of 210,000 vehicles.

Initially, Honda planned to manufacture the new Civic model at its plant in Guanajuato, Mexico, starting in November 2027. However, possible changes in trade policy forced the company to rethink its approach. Moving production to the U.S. will help Honda avoid additional costs, which would likely impact the final price of the car for consumers.

Beyond economic factors, political considerations may have also played a role in the decision. Mexican President Claudia Sheinbaum and Economy Minister Marcelo Ebrard have already voiced concerns over the potential tariffs, warning that such measures could hurt not only Mexico’s economy but also American consumers. The cost of cars could rise by $3,000 to $12,000 due to increased production expenses.

The broader automotive industry is also responding to these economic risks. General Motors, Ford, and Stellantis are evaluating potential consequences and looking for ways to optimize their supply chains. Meanwhile, BMW and Volkswagen are exploring options to expand their U.S. manufacturing capacity to avoid possible trade restrictions.

Honda’s decision is not just about relocating production—it is an adaptation to a new economic reality shaped by political uncertainty and growing protectionism. The key question now is whether other automakers will follow Honda’s lead and how these shifts will reshape the global automotive industry.

Source: autoblog.com