Honda to Move New Vehicle Production from Mexico to Indiana?

Indiana will reportedly soon be home to a brand new Honda manufacturing facility that will specialize in building the next generation Honda Civic.

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In 2023 alone, Indiana auto manufacturing facilities built a combined total of 948,130 vehicles. The state is currently home to several plants, from Toyota in Princeton to Stellantis in Kokomo. However, according to multiple reports, it looks like the Hoosier State's auto manufacturing footprint is about to get a little bigger.

Honda to Expand Indiana Operations

According to Inside Indiana Business, Japanese automaker Honda is planning to shift production of one of its hybrid vehicles to Indiana. The reported move is believed to be in response to U.S. President Donald Trump's tariffs. According to the White House, President Trump implemented a 25% additional tariff on imports from Canada and Mexico and a 10% additional tariff on imports from China this week.

The brand's next-generation Civic Hybrid was originally set to be produced in Guanajuato, Mexico, in 2027. However, it’s been reported that production will now take place in Indiana starting in 2028. Annual production is expected to reach 210,000 units, though it’s unclear exactly where that will occur. Currently, the only Honda factory in Indiana is located in Greensburg, where the company manufactures the Civic Hatchback, CR-V, and Insight Hybrid.

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A History of Tariffs and U.S. Auto Manufacturing

Since his first term, President Trump has said he's focused on strengthening American manufacturing. In 2017, Japanese automakers Toyota and Mazda unveiled plans to build a $1.6 billion joint production facility in the U.S., which would create up to 4,000 new jobs. The facility, now fully operational, is located in Huntsville, Alabama.

Similar to Honda's current decision, Politico previously reported that Toyota and Mazda's move was prompted by the threat of tighter automotive trade rules under NAFTA. However, Honda itself has yet to confirm the reports regarding moving more production to Indiana. So far, the car company has said little about expanding operations in the Hoosier State.

The Risks Associated with President Trump's Tariffs

At the moment, it's unclear if President Trump will be able to strike a deal with Mexico and Canada amid the new tariff war. Economic forecasters from Autoweek report that even if a deal is struck in the next two weeks, the prices of vehicles and parts made outside the U.S. could climb in the short term. Additionally, vehicle production could be cut dramatically, which would create a supply shortage. Out of the 25 automakers operating in North America, 11 have assembly plants in Mexico, while five have facilities in Canada.