Honda has decided to produce its next-generation Civic hybrid in Indiana, starting May 2028, to avoid potential U.S. tariffs on Mexican goods, according to Reuters.
The decision marks a shift from Honda’s initial plan to manufacture the Civic in Guanajuato, Mexico, beginning November 2027. This 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.
Those tariffs are expected to go into effect Tuesday.
It has not been confirmed that Honda plans to manufacture the next-gen vehicles at its plant in Greensburg, but the Decatur County facility is the only Honda plant in Indiana.
Reuters said a Honda spokesperson declined to comment on changes to the Civic production plan, stating that the company would continue to consider demand and the business environment in its global production and allocation decisions.
Japan’s second-largest automaker initially chose Mexico due to rising production costs in Indiana and Canada. However, the potential tariffs have made Indiana a more viable option for the Civic hybrid’s production, Reuters says.
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.
About 40% of the vehicles Honda sells in the U.S. are imported from Mexico and Canada. Additionally, Honda exports around 60,000 cars made in the U.S. to Mexico or Canada, which could lead to further cost increases if retaliatory tariffs are imposed.
Honda’s 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.
