Reports say Honda is discarding plans to produce the next civic model in Mexico and move production to Indiana to avoid future tariffs on President Trump.
The Japanese automotive giant was first planning to start manufacturing the next generation of Civic in Guana Jauto, Mexico from November 2027. The source told Reuters.
Currently, Honda plans to manufacture a new Civic in Indiana from May 2028. Approximately 210,000 vehicles are released each year, sources told the outlet.
Honda shares rose 1% on Monday morning.
The automaker declined to comment on the report, but said it had the flexibility to “produce products in each region based on customer needs and market conditions.”
Honda is the latest major company considering pivots into US manufacturing after Trump revealed his plans to collect 25% tariffs in Mexico and Canada.
Rival automaker Stellantis reversed plans to close Illinois facilities in January after Chairman John Elkann promised to meet with Trump and boost US manufacturing jobs.
Meanwhile, Volkswagen is reportedly weighing US production sites for Audi and Porsche brands to avoid the proposed tax, according to a German news outlet.
Sources told Reuters that Honda initially focused on Mexico in Indiana or Canada due to lower production costs.
The company currently sends about 80% of Mexico's production to the US. It tracks China, the world's second largest automotive market.
Large automakers like Honda rely heavily on sales in the US. The company sold approximately 1.5 million cars and trucks in the United States last year.
These sales included over 240,000 affordable citizens. This is an increase of 21% from the previous year. The company said January.
Honda's chief operating officer Aoyama warned last year that if Trump imposes tariffs on vehicle imports, automakers must consider moving production to the US.
Currently, approximately 40% of the vehicles Honda sells in the US are imported from Mexico and Canada.
Honda also exports approximately 60,000 cars made in the US to Mexico or Canada. Japanese automakers could face even more cost increases if neighboring countries respond with retaliatory tariffs.
Canadian Prime Minister Justin Trudeau ordered a 25% tariff in the US in early February, but agreed to suspend the plan for 30 days along with Trump's own tariff plan.
Mexican President Claudia Sheinbaum said Monday in a press conference that she was waiting to see her administration whether her administration will impose tariffs on Tuesday, when the 30-day suspension ends.
In February, Shanebaum said he plans to collect retaliatory tariffs in the United States, but did not provide details on the size and timing of the tax.
Commerce Secretary Howard Lutnick said tariffs planned on Sunday would move forward on Tuesday.
With post wire
