Honda Motor Co. plans to shift production of several key models to the United States from Mexico and Canada as it grapples with the impact of President Donald Trump’s 25% tariff on imported vehicles, Nikkei reported.
The Japanese automaker intends to increase US manufacturing by up to 30% over the next two to three years, enabling it to produce vehicles equivalent to 90% of its domestic sales, up from the current 70% level. Currently, the US represents Honda’s biggest market, accounting for nearly 40% of its global sales with approximately 1.4 million vehicles sold annually.
Production of the CR-V SUV and Civic sedan from Canada and the HR-V small SUV from Mexico are primary targets for relocation. Honda will explore expanding US capacity through additional hiring to implement three-shift operations and weekend production at existing facilities.
The company estimates the additional tariffs could cost it up to ¥690 billion ($4.57 billion) annually. Though US labor costs are higher, Honda has determined that mitigating tariff impacts takes priority.
Global Executive Vice President Shinji Aoyama previously indicated that roughly one-third or more of Honda’s US business involves overseas components shipped by air or imported from Canada and Mexico. The production shift will require significant supply chain adjustments and take at least two years to implement fully.
Other automakers are making similar moves. Nissan is considering reducing domestic production of its Rogue SUV in Japan’s Fukuoka prefecture in favor of US manufacturing, while Hyundai recently announced a $21 billion investment plan to expand US production capacity by 70%.
