Honda to Shift Civic Production to Indiana in 2028 to Avoid Tariffs

Honda has announced that it will produce its next-generation Civic hybrid in Indiana starting May 2028, a move aimed at avoiding potential U.S. tariffs on Mexican goods. This decision marks a shift from the company's initial plan to manufacture the Civic in Guanajuato, Mexico, beginning November 2027.

The move is a response to the proposed 25% tariffs on goods from Mexico and Canada by the Trump administration, which has prompted manufacturers to reconsider their production strategies. Honda initially chose Mexico due to rising production costs in Indiana and Canada, but the potential tariffs have made Indiana a more viable option for the Civic hybrid's production.

"We will continue to consider demand and the business environment in our global production and allocation decisions," said a Honda spokesperson, declining to comment on changes to the Civic production plan.

The expected annual production in Indiana is around 210,000 units. If production in Indiana falls short of demand, Honda may consider importing from nations not affected by the tariffs. Mexico has been a cost-effective production hub for many automakers, with Honda exporting approximately 80% of its Mexican output to the U.S., the world's second-largest auto market.

Honda's Chief Operating Officer Shinji Aoyama previously warned that permanent tariffs on imported vehicles would necessitate a shift in production plans. Honda sold over 240,000 Civics in the U.S. last year, making it the company's second-best seller after the CR-V. U.S. sales of the Civic rose 21% year-on-year, highlighting its popularity.

The decision to shift Civic hybrid production to Indiana underscores the significant impact of potential tariffs on manufacturing strategies, as automakers navigate the complexities of international trade and production costs.