Honda, Japan’s second-largest automaker, is shifting production of its flagship models from Canada and Mexico to the U.S. in response to the 25% auto tariff imposed by the Donald Trump administration. The plan is to restructure its supply chain so that 90% of its U.S. sales can be procured locally over the next two to three years.
According to the Nikkei on April 15, Honda currently sells 1.42 million vehicles in the U.S., which accounts for 40% of its global sales, and about 1 million vehicles, or 70% of those, are produced in the AmericanHonda estimates that if it expands its U.S. production by 30% (1.3 million vehicles), it will be able to produce 90% of its U.S. sales locally.
Of the 500,000 Honda vehicles currently imported by the U.S. annually, about 300,000 come from Canada. Nikkei reported that the sports utility vehicle (SUV) CR-V and sedan Civic, which are the main models handled by the Canadian factory, are candidates for relocation to the U.S. Both models are currently being produced at the U.S. factory, but the plan is to increase the scale by changing the existing two-shift system to three shifts or operating the factory on weekends. It is expected that it will take at least two years until the production transfer is completed, as it is necessary to establish a system for increasing production in stages along with the parts supply chain.
The compact SUV HR-V manufactured in Mexico is also considering moving production to the U.S. Since the HR-V is not a model that is manufactured separately in the US, new investment is necessary for local production.
According to related statistics, Honda is expected to be affected by US automobile tariffs by 700 billion JPY (approximately 4.9 billion USD) annually. In order to reduce the impact, it is necessary to increase the proportion of production in the U.S.
Meanwhile, in addition to Honda, Nissan Motor Co. is also considering switching some of the Japanese production of its main model for the U.S. market, the Rogue, to local production in the U.S. this summer. The plan is to start reducing production at the Fukuoka plant in May and move production to 10,000 units in July, gradually reducing the impact of tariffs.
