Honda is scrapping plans to produce its next Civic model in Mexico and moving production to Indiana to avoid President Trump’s upcoming tariffs, according to a report.
The Japanese auto giant had initially planned to manufacture the next-generation Civic in Guanajauto, Mexico, starting in November 2027, sources familiar with the matter told Reuters.
Now, Honda plans to manufacture the new Civic in Indiana, starting in May 2028 – churning out around 210,000 vehicles each year, a source told the outlet.
Honda shares rose 1% on Monday morning.
The automaker declined to comment on the report, but said it has flexibility to “produce products in each region based on customer needs and market conditions.”
Honda is just the latest major company to consider a pivot to US manufacturing after Trump revealed his plan to levy 25% tariffs on Mexico and Canada.
Rival automaker Stellantis reversed plans to shutter its Illinois facility in January after its chairman, John Elkann, met with Trump and promised to boost US manufacturing jobs.
Volkswagen, meanwhile, is reportedly weighing US production sites for its Audi and Porsche brands to avoid the proposed taxes, according to a German news outlet.
A source told Reuters that Honda was initially eyeing Mexico over Indiana or Canada because of its cheaper production costs.
The company currently sends about 80% of its Mexican output to the United States – which is the world’s second-largest auto market, trailing China.
Large automakers like Honda rely heavily on US sales. The company sold nearly 1.5 million cars and trucks in the United States last year.
Those sales included more than 240,000 of its affordable Civics – representing a 21% rise from the year before, the company said in January.
Shinji Aoyama, Honda’s chief operating officer, had warned last year that the carmaker would have to consider moving production to the US if Trump imposed tariffs on vehicle imports.
Currently, around 40% of the vehicles that Honda sells in the US are imported from Mexico and Canada.
Honda also exports about 60,000 cars made in the US to Mexico or Canada. If the neighboring countries respond with retaliatory tariffs, the Japanese automaker could face even more cost increases.
Canadian Prime Minister Justin Trudeau had ordered 25% tariffs on the US in early February, but agreed to pause the plan for 30 days along with Trump’s own tariff plans.
Mexican President Claudia Sheinbaum said Monday during a press conference that her administration is waiting to see if Trump will impose the tariffs on Tuesday, when the 30-day pause is set to end.
In February, Sheinbaum had said she planned to levy retaliatory tariffs on the US, though she has not provided details on the size and timing of the taxes.
Secretary of Commerce Howard Lutnick said Sunday that the planned tariffs would move forward on Tuesday.
With Post wires
