Honda may move the next-generation Civic production from Mexico to the U.S.

Steep tariffs are causing the brand to reconfigure its plans for its second best-selling vehicle.

Mar 10, 2025 - 01:24

Honda may move the next-generation Civic production from Mexico to the U.S.

The 2025 Honda Civic is a huge hit with consumers and automotive critics alike, largely based on its improved interior and exterior design, excellent driving manners, and its wide range of trims, including the affordable Sport, performance-oriented Si, high-performance Type R, and the powerful and efficient Civic Hybrid.

In 2024, Honda sold over 240,000 Civics in the U.S., making it the company's second-best-selling model after the fully redesigned CR-V crossover.

Honda, however, has encountered production challenges due to the recently implemented high tariff rates. According to three anonymous sources cited in a recent report from Reuters, Honda has decided to move the production site of the next generation of its popular and well-reviewed Civic Hybrid from Guanajuato, Mexico to Indiana to circumvent U.S. tariffs on Mexican goods.

The current high-performance Civic Type R is built in Japan and will likely remain there.

Big tariffs lead to big changes

Honda had planned to build the next-generation Civic in Mexico starting in November 2027 as a 2028 model, but news of the 25 percent tariff proposed by President Trump’s administration was the impetus behind the change in manufacturing location.

U.S. President Donald Trump, joined by Secretary of Commerce Howard Lutnick, delivers remarks on reciprocal tariffs in the Oval Office at the White House on February 13, 2025 in Washington, DC.
Andrew Harnik/Getty Images

As a result, production of the next-generation Civic will be delayed by six months to May 2028. The Indiana plant is expected to produce approximately 210,000 units per year. Honda initially planned to move its Civic manufacturing to Mexico to keep costs low, with approximately 80 percent of its cars currently being imported to the U.S. from Mexico.

This strategic and, no doubt, expensive move marks the first significant response by a major Japanese automaker to the new and significant tariffs that have been levied by the new administration. Honda's decision underscores the disruptions these new tariffs are causing in the automotive industry, leading automotive manufacturers to re-evaluate their production and supply chain strategies. Expect the ripple effect to continue across the industry.

In more recent news reported by NBC, President Trump modified the details of the tariff on Mexican goods by providing a one-month reprieve from the tariffs imposed on Tuesday, March 4th. He further stated that goods that complied with certain rules of the U.S.-Mexico-Canada Agreement (USMCA) would be able to move between those three countries tariff-free. This means that to be imported from Mexico, products like automobiles would have to have 75 percent of their content from North America.

It is unknown how this "75 percent U.S. content" clause will impact the Honda Civic, as Honda has not officially released a statement on the changes to the Civic production plan. A Honda spokesperson did, however, clarify that they are willing to compromise with the administration on this matter.

"We thank President Trump for recognizing our commitment to manufacturing vehicles in America, and we look forward to working with the administration and Congress on pro-growth policies that support a robust U.S. auto industry," the Honda spokesperson said. "While Honda did not announce plans for a new plant in the U.S. at this time, we have invested over $3 billion in advanced vehicle manufacturing in America in just the past."

Final thoughts

It’s too early to tell what the impact of the tariffs will be on the automotive industry, but the early news aren't positive. Manufacturers will have to make significant changes in their production and supply chain strategies to minimize costs and adjust for the high tariff rates.

American automotive production will surely increase, but there will also likely be price increases on automobiles across the board. It seems Honda is making pre-emptive changes based on what might be an inevitability.

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