In a strategic move to bolster its manufacturing presence in the United States, Honda has announced plans to shift production of several key models from Canada and Mexico to American factories. This decision comes as the company aims to mitigate the impacts of rising tariffs and trade tensions, particularly in light of recent import duties imposed by the U.S. government.
As of now, approximately 70% of Honda vehicles sold in the United States are already produced domestically. Models such as the Accord, Pilot, Odyssey, and Ridgeline are manufactured in the U.S., which has allowed Honda to navigate tariff challenges effectively. However, the company's latest strategy, described as "sell where you build," seeks to increase this figure significantly.
According to reports from Nikkei Asia, Honda plans to move the production of the popular Civic and CR-V models from Canada to the U.S. Additionally, the HR-V will be transitioned from Mexico to American plants. This shift is expected to enhance Honda's ability to respond to market demands and regulatory changes while maintaining competitive pricing.
In a statement regarding the production changes, Honda emphasized its commitment to the U.S. market, which accounts for about 40% of its global sales, translating to approximately 1.42 million vehicles annually. To support this increased production capacity, Honda will expand its operations from two shifts to three shifts in its American factories, leading to the creation of new jobs.
Despite these shifts, Honda's Canadian operations will continue to run at full capacity. The Alliston, Ontario plant is expected to maintain production levels to serve the Canadian market. A spokesperson from Honda Canada confirmed, "This is not an official announcement from Honda. We cannot comment specifically on today's news. However, we assure that our Alliston plant will continue to operate at full capacity and that we are always exploring options to adapt our production plans as necessary to address business impacts."
In 2024, Honda was the second-largest car manufacturer in Canada, with 69% of vehicles sold in the country produced domestically. The Civic remains the best-selling passenger car in Canada, while the CR-V is recognized as the top-selling hybrid model in the nation.
Meanwhile, Mexican Economy Secretary Marcelo Ebrard confirmed on April 15, 2025, that Honda has no immediate plans to alter its production strategy in Mexico. This announcement followed speculation regarding Honda's potential relocation of some production from Mexico and Canada to the U.S. Ebrard stated, "I confirm that Honda in Mexico is still considering changes to the company's production plans." He reassured that Honda's operations in Mexico would continue unaffected for the time being, despite the looming tariffs.
Honda's production strategy reflects a broader trend within the automotive industry, as manufacturers reassess their supply chains and production locations in response to evolving trade policies. Competitors such as Hyundai and Nissan are also contemplating similar adjustments, while brands like Audi and Jaguar Land Rover have temporarily halted shipments to the U.S. amid these changes.
The move to enhance production capabilities in the U.S. aligns with Honda's long-term vision of increasing local production to 90% within the next few years. This ambitious target would further strengthen Honda's position in the competitive U.S. market, allowing the company to better manage costs and navigate regulatory landscapes.
As the automotive landscape continues to shift, Honda appears well-positioned to leverage its existing manufacturing footprint in the U.S. to adapt to these challenges. The company's proactive approach in expanding domestic production may serve as a model for other automakers facing similar pressures.
In conclusion, Honda's decision to consolidate production in the U.S. not only underscores its commitment to the American market but also highlights the strategic adjustments necessary for survival in a rapidly changing global economy. As tariffs and trade tensions escalate, Honda's focus on local production could provide a competitive edge, ensuring that the company remains a key player in the automotive industry.
