Honda shall be moving the production of Civic hybrid to Indiana from Mexico amid potential tariff imposed by the US government. To avoid the potential tariff, Honda moves the production to one of the US states, Indiana. The Civic hybrid is one of the top-selling cars of Honda in North America and other parts of the US. The shift highlights how manufacturers are quickly adjusting to the U.S. President’s proposed 25% tariffs on imports from Mexico and Canada.
While many automakers have raised concerns, Honda is the first major Japanese car company to take action. The production of the Honda Civic hybrid was planned to start on November 27 in Mexico because of high production costs in Indiana and Canada. However, new tariff plans of the US government have forced the company to shift to Indiana.
Honda Moves Production of Civic Hybrid to Indiana
Honda plans to move the production of its Civic hybrid in Indiana from Mexico in response to the U.S. government’s plan to impose 25% tariffs on products coming from Mexico and Canada. The decision has not been made public yet, and Honda’s spokesperson has declined to make any comment on the matter. This move will underscore Honda’s commitment to its North American market, emphasizing the importance of domestic production to maintain competitive pricing and avoid the additional burden of tariffs.
Shifting production to Indiana allows the company to mitigate potential cost increases, maintaining affordability for consumers while supporting the local economy and creating jobs in the region.
Why Honda Chose Indiana?
When it came to shifting production from Mexico, Honda carefully evaluated several factors before settling on Indiana as the new manufacturing site for its Civic hybrid. The decision to move production to Indiana must be largely driven by the state’s long-standing automotive manufacturing infrastructure, skilled workforce, and proximity to Honda’s existing North American operations.
Indiana has been a hub for Honda’s production for years, making it an ideal choice for expanding production capabilities. In addition, the state’s favorable business climate, including tax incentives and infrastructure improvements, made it a more cost-effective solution than other states.
Honda Civic Hybrid: Top Selling Car in North America
Honda sold around 1.4 million cars and trucks in the U.S. last year, including Acura models. The Civic, both gasoline and hybrid, accounted for over 240,000 units, making it Honda’s second-best seller after the CR-V. US sales of the Civic, known for its affordability, grew 21% compared to the previous year. About 40% of Honda vehicles sold in the US are imported from Mexico and Canada. The company also exports roughly 60,000 cars made in the US to Mexico and Canada. If those countries impose retaliatory tariffs, Honda could face higher costs.
Honda Stock Update
Over the past week, Honda Motor stock has experienced a slight decline of approximately 0.69%, settling at $27.33 as of March 5, 2025. This minor dip contrasts with a more significant 20% drop over the past year, highlighting recent fluctuations. The announcement on March 3, 2025, regarding Honda’s decision to relocate Civic hybrid production from Mexico to Indiana to circumvent proposed 25% U.S. tariffs has not led to immediate stock recovery.
