The Japanese automaker may shift production from Canada and Mexico to the U.S
As international trade tensions continue to escalate, automakers are rapidly adjusting their strategies. With tariffs rising and uncertainty mounting, car companies are being forced into swift, high-stakes decisions about where to build their vehicles. While some manufacturers are freezing exports or increasing prices, Honda appears to be taking a different route—one that focuses on building more vehicles where it sells them.
Rather than retreat, Honda may be preparing to significantly expand its manufacturing footprint in the U.S., shielding itself from tariffs by producing nearly all of its American-bound vehicles domestically.
The U.S. is Honda’s largest market, accounting for roughly 40% of its global sales—about 1.42 million vehicles annually. Of those, around 70% are already assembled in the U.S., including the Accord, Pilot, Odyssey, and Ridgeline. By building those models locally, Honda is already sidestepping the harshest tariffs on U.S.-made vehicles. However, imported parts are still subject to duties, and the company is reportedly looking to cut even more risk out of the equation.
Shifting North American Production
According to Nikkei Asia, Honda could ramp up its U.S.-based output to cover as much as 90% of all vehicles sold in the country. That includes shifting production of the Civic sedan and CR-V from Canada to the U.S., and relocating HR-V production from Mexico. To handle the increased volume, Honda will reportedly move from a two-shift to a three-shift schedule at some American plants and expand its workforce.
Importantly, this doesn’t necessarily mean production in Canada or Mexico will decline. Canada, for example, has introduced retaliatory tariffs on American-made vehicles, so Honda may still produce Canadian models for the local market.
Honda’s approach stands in contrast to several other automakers grappling with trade uncertainty. While Audi and Jaguar Land Rover are pausing U.S. exports altogether, Hyundai and Nissan are considering expanding U.S. production. Mitsubishi, meanwhile, has halted deliveries to U.S. dealers temporarily. In this landscape, Honda seems especially well-positioned to capitalize on its already-strong domestic manufacturing base.
Canadian Operations Respond
In response to the report, Honda Canada released a statement clarifying that its facility in Alliston, Ontario, will continue running at full capacity. While it did not confirm plans to boost U.S. production, it emphasized the flexibility of its North American manufacturing network.
“This was not an announcement by Honda and we cannot comment on the specifics of this morning’s headlines. However, we can confirm that our Canadian manufacturing facility in Alliston, Ontario, will operate at full capacity for the foreseeable future and no changes are being considered at this time.”
Honda Canada also noted its local production strength: nearly 70% of Hondas sold in Canada are built there, and 99% are sourced from within North America. Sales in Canada are up 9% in Q1 2024, led by the Alliston-built Civic—Canada’s best-selling passenger car—and the CR-V, which holds the top spot among hybrids.
As the tariff war continues to reshape the auto industry, Honda’s pivot toward domestic manufacturing may offer it a key advantage—insulating its most important market while keeping production local and agile.
