As the threat of tariffs on Canadian and Mexican products weighs heavy like the gaseous aftermath of the Arby’s Meat Mountain, more and more automakers will have to adjust plans in order to best protect themselves. The next table to turn? It might be Honda. According to a recent report, it seems that Honda may build the next-generation Civic in Indiana in order to mitigate the effect of proposed tariffs on its popular compact sedan.
Wait a second, doesn’t Honda already build Civics in Indiana? Why yes, Honda Manufacturing of Indiana currently builds most Civic Hatchbacks for North America, but that certainly doesn’t account for all U.S.-market Civics, nor is it alleged that twelfth-generation model production in Indiana was previously planned. As Reuters reports:
Japan’s second-largest automaker had initially planned to manufacture the next-generation Civic in Guanajuato, Mexico, according to the three people. Production was slated to start from November 2027, according to one of the people.
Not only does a timeline of late 2027 make sense considering the tenth-generation Civic enjoyed a six-year model cycle and the eleventh-generation Civic launched in 2021, but making the next Civic in Mexico would’ve also made sense considering available facilities and manufacturing costs. Honda currently builds the HR-V in Guanajuato, and car manufacturers have flocked to Mexico over the decades for cheaper labor. However, that may all come to a halt soon.
The White House has announced that blanket tariffs of 25 percent on Canadian and Mexican goods will go into effect March 4. While this administration has delayed the implementation of these tariffs before, the hunch of a bluff isn’t enough to make huge business plans on. The threat of a 25 percent tariff on an entire product isn’t one to ignore, so building the next Civic in Indiana may limit potential damage.
However, keeping production in Indiana might not be enough to keep pricing in line with what we’re used to. The North American carmaking industry relies heavily on suppliers in Canada and Mexico, and if all those Canadian and Mexican parts get hit with tariffs, the total cost of each finished vehicle would go up. As Automotive News reports, if these tariffs get implemented, it could cost somewhere between $4,000 and $10,000 to build a car in North America, and even the lower figure represents a huge chunk of a compact car’s price tag.
Oh, and what about Alliston? It’s no secret that this administration has stated its desires to put blanket tariffs on Canadian goods, and Honda of Canada Manufacturing currently builds all the Civic sedans for North America. If virtually 100 percent of next-generation Civic production shifts to Indiana to avoid potential tariffs on Canadian goods, what are the roughly 4,200 Honda workers in Canada going to build? The plant is already Honda’s main CR-V plant globally, so there is a hedge here, but there’s also potential for serious pain.
If the proposed tariffs come into effect and this report on future Civic production comes true, keeping production in Indiana would limit damage but probably wouldn’t prevent it wholesale. It wouldn’t be surprising if the price of the next Civic does go up, as broad tariffs can impact a whole lot more than people see on the surface.
Top graphic image: Honda
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Thanks for clarifying what other outlets haven’t, that some (not all) Civics are produced in the US already. I’m shopping the hatchback hybrid and all have had a “1” VIN code. I still don’t know whether to buy or not, and I have avoided because inevitably my insurance will go up by a lot. I will say that if a hybrid Civic balloons to 40k I will probably just drop out of the new car market, possibly forever. Was hoping to “treat” myself to something, but I’m not keen on flushing money down the toilet. I’d rather just remodel my bathroom instead.
Just…..ugh. The Russian asset Musk and his flunky Trump are doing this to Make Russia Great Again.
Just wait until the market indices hit correction territory. Maybe this week.
That’s when we’ll see the “back door deal” that Trump expertly struck with Sheinbaum and Trudeau and he’ll take full credit for negotiating the deal.
I can’t speak for everyone, but there are far more people I know in a financial tight spot thanks to inflation than anyone I’ve known with fentanyl problems. I’m not saying that isn’t an issue, but it’s not an issue where you ignore a scalpel and use a sledgehammer instead.
I also know some of those people, and they all voted for Trump to “fix the economy”.
Nevermind he’s managed to bankrupt casinos (multiple times) that he got with his daddy’s money, and has defrauded his partners, his contractors, and the state and federal govt (not counting he’s a convicted rapist).
All this to say I’m not at all sad for what’s about to happen to them and their money now, they asked for it You can’t save someone who doesn’t want to be saved.
It was never about fentanyl. Or immigrants. They’re just bogeymen he’s using to justify doing crappy things that only benefit him and his rich friends.
Complain about immigrants from a bordering country coming to the U.S. for a better economic opportunities. Implement policies to undermine the economy of said bordering country and increasing the economic incentive for those immigrants to continue to come to the U.S. Claim victory.
You forgot the word “illegal” my dude. There isn’t a country in the world where you can just show up and live in all willy-nilly.
Sure, there are a few where you can probably get away with it if you stay super low-key, but it’d still be against their laws.
Tell that to my friends from Venezuela who are 100% legal, taxpaying residents under TPS but are now facing getting deported because Trump illegally canceled their TPS.
Everyone knows that the people who supported a career criminal who has stated multiple times that the constitution doesn’t apply to him and his buddies don’t care about legal or illegal. They just don’t like anyone who isn’t a straight white male.
Of course, the ancestors of the racists who complain about immigration status the loudest were folks who came to this country all “willy nilly” since, for most of our history, there were no immigration laws outside of a few overtly racist ones.
Besides, when the biggest problem with immigration status has been caused and maintained by the same people who bitch the loudest, it is pretty obvious that the entire topic is little more than a political maneuver to rile up their low-information constituents.
Don’t worry; soon, there will be plenty of inexpensive UAZ, VAZ, and GAZs available. They might be built in Russia, but all the labor will be American…political prisoners sent to Siberia.
or El Salvador
Still won’t be as good as a Toyota.
I bought a new car (a Subaru built in Japan) several months ago, and I’m glad I pulled the trigger when I did. Even got a nice discount, a big change from Pandemic pricing. My timing hardly ever works out like that.
I hope all the retired military MAGA people who were first in line for their civil service jobs and just fired are happy with their choice.
‘Why would the leopards eat my face??’
Is it possible I bought a whole bunch of shit recently because I knew so many things were about to get all fucked up? It is. And I’m not exactly prescient; it was just so obvious.
MAGA people got scammed more than anyone but the sunk cost fallacy will just make them even more fervently angry at the left. The hyper defensive rationalizations and blame games will be epic. It’s a sick angry cult with racist undertones that wants to fuck shit up, that’s the reality. However, it’s also the scam of the millennium. Taxes will be cut, money will be made, and wealth will continue to move in the same direction. Not into the pockets of MAGA faithful, but into those of the donors, yes, and that’s the whole point.
Bought a bunch of stuff recently too for the exact same reason.
But tariffs go straight into the government coffers and help pay for tax cuts on the wealthy who already carry far more share of the burden than they should. They, or their forbearers, worked hard for that money and they shouldn’t have to share it. Tariffs are fair, not like some regressive as fuck tax on those already struggling. If the poors can’t afford things, they should work harder or just go without, right?
I agree! If a CEO has to work 80 hours a week to make 20 million a year why should someone making minimum wage get special treatment???
BOOTSTRAPS!!
Don’t forget the 25% tax on Steel and 25% tax on Aluminum. That is going to work out great for US manufacturers.
Cost more than 100K manufacturing jobs when Trump did it back in 2018. Same thing happened when Bush did it back in his first term.
I was in mfg at that time and they were frantic trying to cut costs because our raw materials went up significantly. There were jobs cut (1 or 2 out of ~30 people) and I believe we ended up losing money on a couple jobs due to the cost increase from contract time to build time.
We cut just shy of 1,000 blue collar jobs and accelerated offshoring white collar. In 2018 my engineering group was 100% US based. Today it is 60%.
Seems we could use a smaller, cheaper Honda to Fit into the market underneath the Civic again…
I mean the Fit was made in Japan – then Mexico so … would it help?
Hey I can’t fix crazy I just want the Fit back…
and then fewer and fewer people bought the fit and demand for the HRV exploded so honda just stopped production of the fit and switched to only making the hrv.
Globally there’s still a great Fit out there. If it existed in the US I’d recommend the Fit Hybrid to literally everyone. And drive one.
yeah i was referring to the plant in mexico that sold to the us market.
That’s fair.
So. Much. Winning!!!!!!
/s
I’m tired of winning.
A buddy of mine was shopping for Tellurides over the weekend and we were talking about whether to buy now or hold off and how much effect the tariffs would have. I told him flat out that if he was going to pull the trigger he needs to do it NOW. Tellies are assembled in the US but tariffs will hit the components hard. I also see the used market shooting up as new prices increase across the board. Knowing the dealer industry, price increases are going to start before post-tariff cars even start hitting the lots.
In a more general vein, the only explanation I can come up with for the current administration is that they’re DELIBERATELY trying to tank the economy. As to why that would be a goal, I guess I’m not enough of a stable genius to figure that one out.
So the wealthy fucks can buy the rest of America for nickels On the dollar.
We’re all working in the company store now.
So instead of the old “trickle-down” economic model where the poor are forced to rely upon the largesse of the rich, it’s more of a “Hoover-up” model where the rich apply a giant vacuum to the country and suck up all the crumbs. Sounds about right!
Yep, just like governmental buildings…force the GSA to sell the US-owned ‘unused’ buildings they lease space to other departments, forcing those departments (sometimes courts!) out on the street. The private companies can then lease them back – if they want – at a likely much higher cost.
It’s never been about government spending, it’s been about helping their buddies by privatizing everything they can.
They are all extremely stupid, extremely vindictive, and managed to gain unlimited resources – mostly through generational wealth and luck.
They aren’t so much deliberately trying to tank the economy as it is they don’t know how any of it works, and also have vendettas against Mexico (because they’re racist) and Canada (I’m not sure where this one comes from. Maybe CTV doesn’t broadcast the Apprentice.)
They aren’t smart enough to do anything deliberately. They are just doing whatever Putin tells them to do.
It’s easy. Simply assume the government is being run by Russian and Chinese spies to destroy its capabilities at home and abroad, and everything clicks into place.
I do know one thing, it’s not being run by people who care about the national debt. The House budget resolution includes $2.5 TRILLION of deficit spending.
Expect the cost of everything you buy to go up 25-50% in the next year or so.
Except for wages. Those will stagnate or go backwards.
But…but…Biden made mah eggs ‘spensive!
The previous generation of Civic hatchbacks for the US market were assembled in Swindon, UK. Honda closed down the plant after Brexit, ending 36 years of making Hondas in Europe.
Honda’s reasoning was that the Japan-EU trade deal meant that they could import the cars duty-free from Japan, rather than Brexit.
https://www.swindonadvertiser.co.uk/news/19112817.honda-boss-tells-mps-uk-japan-trade-deal-settled-nerves/
You can tell my Type R was built in England based on the panel fitment quality, it’s not great.
It just sounds like a headache for any company with a supply chain in North America. For a while alot of us dealers were getting CRV’s from Canada because the US plants couldn’t meet demand. There was a weird period of time where mexican and Canadian civics had some different parts then the US built one. I wonder if that will be true again.
I have a 2003 CRV that was built in Japan. Curious if any North American Hondas are imported from Japan these days.
Type Rs are only built in Japan. With an engine made in Ohio.
The NHTSA keeps track of that and posts it online every year. The Civic 5 door is the only Honda or Acura model assembled in Japan
US / Canadian part content, country of assembly, country of engine assembly, country of transmission assembly, and country of HV battery assembly here:
https://www.nhtsa.gov/part-583-american-automobile-labeling-act-reports
I’m assuming there’s going to be a lot of annoyed Canadians that are going to seriously reconsider buying a Ford, Chevy, or Tesla and perhaps take a closer look at what Hondas and Toyotas are built by their own countrymen in their own country and reward those manufacturers while helping to keep their own people employed.
I’ve long posited that living in the U.S., buying a Hyundai built in Alabama, a Honda made in Ohio, a Toyota built in Kentucky, or a BMW built in South Carolina does FAR more for the country as a whole than buying a Maverick made in Mexico or a Chrysler made in Canada. Never mind the Lincoln and Buick models built in China.
That’s always a fun when someone with a Mexican or Chinese built car says you shouldn’t buy a “foreign” car. Alot of RAMs are built in Mexico and the Toyota and Nissan are built in the US. By far the funniest one was a guy in a Chevy Trax yelling at someone for buying a Hyundai. Sometimes I see union guys yelling they bought union with a Buick being mad someone bought a Tesla or Hyundai. Once you show them their car was built in china they get quiet really quick.
I’ll never forget the argument I got into with a UAW worker back in college when I was an intern at Corvette Assembly over this. He tried telling me that buying a Camry (Made 2 hours away from us, in Georgetown Kentucky) was less american than his Korean built Chevy.
The Honda Civic has long been the best selling car in Canada. It makes sense they build so many of them here.
My dad was speechless when I showed him that his Buick was built in Korea.
Billionaires don’t buy Hondas, so they don’t care. Now, if there were tariffs on Italy, Germany and Netherlands where custom yachts are built…
Just wait, there will be.
With a carve-out for any seafaring vessel larger than 75 feet.