The New American Tax: Honda’s Civic ‘House Move’

Honda has unveiled its plans to produce the upgraded Civic in the US, marking a shift from its initial strategy to manufacture the vehicle in Mexico. This decision comes amidst the recent changes in tariff policies.

Following a 30-day delay, the 25% tariff on goods imported from Canada and Mexico into the US took effect on March 4. Automotive manufacturers operating in the US, including Honda, have had to adapt their strategies. One such adaptation is focusing production in the US to avoid high tariffs and maintain competitive car prices.

According to Reuters, Honda has chosen to produce the Civic in the US instead of Mexico as initially planned. Currently, the Honda Civic sedan variant is manufactured at the Alliston plant in Ontario, Canada, while the hatchback variant is produced in Greensburg, Indiana, USA.

Honda’s decision to shift Civic production to the US is influenced by tariff developments. Image: Honda.

Previously, Honda had intended to commence production of the upgraded Civic at its Guanajuato plant in Mexico from November 2027. This move was aimed at mitigating the rising costs in the US and Canada. However, the new tariff policies have disrupted Honda’s plans, resulting in a delay in the start of Civic production in Mexico until May 2028. For now, all Honda Civic variants will be manufactured at the Indiana plant in the US.

Honda had projected an annual production of approximately 210,000 Civic vehicles at its Mexican plant. In contrast, Honda Civic sales in the US reached 242,005 units last year. To meet the current demand, Honda may need to import some Civic vehicles from countries unaffected by the new US tariff policies.

Honda may need to import additional Civic vehicles to meet US consumer demand. Image: Honda.

According to Reuters, Honda has neither confirmed nor denied these reports. Currently, about 40% of the vehicles Honda sells to US customers are imported from Canada or Mexico. As a result, the new tariff policies present a significant challenge for the Japanese automaker, and US consumers may face higher prices for Honda vehicles.

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