Honda is moving production of its Civic hybrid to Indiana in response to potential U.S. tariffs on imported vehicles, reflecting broader concerns among automakers about trade policies and manufacturing costs, according to Reuters.
Honda had originally planned to build the next-generation Civic in Mexico, beginning in November 2027, but will instead produce the car in Indiana beginning in May 2028.
Shinji Aoyama, Honda’s chief operating officer, warned in November that permanent tariffs on imported vehicles would force the company to reconsider its production strategies. With approximately 40% of Honda’s U.S. sales coming from imported vehicles -- primarily from Mexico and Canada -- the automaker faces mounting pressure to localize manufacturing to avoid additional costs.
The Civic, Honda’s second-best-selling model in the U.S. after the CR-V, saw a 21% increase in sales last year, with more than 240,000 units sold. The company also exports around 60,000 U.S.-made vehicles to Mexico and Canada, which could be affected if retaliatory tariffs are introduced.
Honda’s decision to relocate Civic hybrid production to Indiana highlights the ongoing challenges automakers face in balancing supply chain efficiency, cost management, and trade policy uncertainties. This shift aligns with broader industry trends, as manufacturers seek to mitigate financial risks associated with evolving international trade regulations.
