Honda to make new Civic hybrid in Indiana—not Mexico

According to Quartz, Honda had initially planned to manufacture the Civic in Guanajuato, Mexico, where it opened a plant in 2014 with an annual production capacity of about 200,000 units. However, with President Donald Trump threatening to impose a 25 percent tariff on goods from Canada and Mexico, the company has reconsidered, deciding to produce the new Civic in Indiana instead.

Honda already produces the Civic sedan, CR-V SUV, and Insight hybrid sedan in Indiana and is looking to produce around 210,000 Civics annually but will explore importing car parts from countries unaffected by the tariffs.

Honda Chief Operating Officer Shinji Aoyama previously said that the automaker might adjust production if the US imposed tariffs on imported vehicles. “We have the flexibility to produce products in each region based on customer needs and market conditions,” Honda said in a statement.

The US is expected to impose 25 percent tariffs on imported goods from Canada and Mexico, which would affect major automakers like Ford and Stellantis. Stellantis has already made moves to restart a car plant in Illinois as the Trump administration has taken the White House.

During a February 13 call with financial analysts, Aoyama noted that the tariffs could have a “$20 billion plus impact.” He added that Honda would adjust production to mitigate the effect, shifting some manufacturing from Mexico and Canada to the US.

Regarding steel and aluminum, the Honda executive said, “I don’t think it is very difficult to address that situation of the tariff for those two materials.” Trump has also issued tariffs on imports of the metals.

The tariff threats from Trump against Canada as well as Mexico have been in response to the flow of illegal immigration as well as fentanyl being smuggled into the United States.