4 ms·

Honda to produce next Civic in Indiana, not Mexico, due to US tariffs

39 points by alephnerd 2y ago

aurareturn 2y ago
And it'll cost more. Trump will say it's a win. But other countries will get cheaper Hondas. American consumers lose out in the end.
- alephnerd 2y ago
  Honda has been working on moving much of it's supply chain to the US for a long time - they have multiple factories across Ohio and Alabama. In 2023, they announced that they were moving all Honda Accord manufacturing to the US [0], and their prices haven't changed significantly either ($27,615 in 2022 to $28,295 in 2025 compared to median household incomes rising from $74,755 in 2022 to $77,719 in 2023 - 2024 and 2025 numbers aren't out yet). Most base model products won't see significant prices changes due to price elasticity of demand and better in built margins, but mid-upper tier products will see prices soar because the customer base targeted with those products tend to have a greater tolerance to price increases. The biggest pain will be bore by dealerships, as manufacturers finance cars to them at a wholesale rate, and the dealers set the final list price. As such, they will now have to either reduce their margins or see their local demand leave. [0] - https://www.wdrb.com/news/honda-decides-to-move-all-accord-production-to-indiana-manufacturing-plant/article_89d72f98-c356-11ed-b937-e360bf5f6e81.html https://www.wdrb.com/news/honda-decides-to-move-all-accord-p...
  - delfinom 2y ago
    I ponder if it's really because sedan sales have been shrinking YoY to this day and the volume has gotten small enough to cram into a existing factory. Based on some data here https://carfigures.com/us-market-brand/honda/accord https://carfigures.com/us-market-brand/honda/accord (which does come from other sources, this was just the basic tablation I could find) the accord sale numbers are half of their peak only a 6 years ago
    - alephnerd 2y ago
      > I ponder if it's really because sedan sales have been shrinking Nope. It's part of Honda's $4-5 billion US expansion as part of their EV and Hybrid car drive [0][1] which also expanded production output. They're moving their cars to a hybrid and electric first model similar to what Toyota began 4-5 years ago. The Biden era IRA subsidizes were the carrot to help restart domestic automotive investments, and the tariffs shock is the stick to force them to capitalize on those instead of trying to co-mingle parts from other non-NAM locations for better margins. [0] - https://alabamanewscenter.com/2022/10/13/what-does-hondas-4-4-billion-ev-expansion-in-ohio-mean-for-alabama/ https://alabamanewscenter.com/2022/10/13/what-does-hondas-4-... [1] - https://www.cnbc.com/amp/2025/02/02/hondas-new-ev-production-revolution-begins-with-1-billion-in-ohio.html https://www.cnbc.com/amp/2025/02/02/hondas-new-ev-production...
- rayiner 2y ago
  > it'll cost more... American consumers lose out in the end So does minimum wages, worker protections, paid family leave, taxes on corporate income, etc. America isn't just an economy populated by "consumers."
  - lazyeye 2y ago
    Yes well said. Although at some point these factories will become almost fully automated. But regardless, better to have them in the US than China.
    - rayiner 2y ago
      Yes they will. But then we’ll have them, and there will be jobs making the robots and maintaining the factories here. Also, when AI replaces knowledge economy jobs, we’ll want the “stuff making robots” in America not China. If AI makes our knowledge industry exports obsolete, then we’ll be really fucked if China has the robots that make stuff.
ZeroGravitas 2y ago
By 2028 they probably won't be able to sell them in Mexico anyway thanks to competition from cheap EVs that the Japanese firms seem bizarrely averse to building. Here's a headline for China last year: > Honda Slashes Gas Engine Production In China After Sales Collapse To Focus On EVs > Honda had a tough year in China, with sales dropping 30.9% to 852,269 units in 2024. This marks the first time in nine years that the Japanese brand has sold fewer than 1 million cars in the country
- alephnerd 2y ago
  > cheap EVs that the Japanese firms seem bizarrely adverse to building. Because all Japanese car manufacturers are waiting in Idemetsu Kosan to start solid state battery manufacturing by 2027-28, hence why Nissan, Toyota, and Honda all have rollout plans by 2028. Japanese companies prefer to buy from other Japanese companies, as the Japanese government's sovereign fund has voting positions in all these companies. > probably won't be able to sell them in Mexico anyway Most car sales in Mexico remain ICE/Gas driven - overwhelmingly Nissan and GM (Chevrolet) [0]. Not a single EV breaks into the top 50, and the only "Chinese" car that breaks into that list is the ICE MG 5. And if you've ever been to Mexico, you'll see how the Nissan Versa is basically the national car. Mexico is equally nationalistic about Oil, as Pemex is a national institution, and Mexico's oil soverign fund has constantly helped stabilize Mexico's economy [1]. > Here's a headline for China last year Mexico has halted incentives for Mexican automotive manufacturers since 2024 [2]. [0] - https://www.focus2move.com/mexico-best-selling-cars/ https://www.focus2move.com/mexico-best-selling-cars/ [1] - https://www.bloomberg.com/news/articles/2020-04-22/amlo-says-mexico-may-get-6-billion-from-oil-hedge-after-rout https://www.bloomberg.com/news/articles/2020-04-22/amlo-says... [2] - https://www.reuters.com/business/autos-transportation/mexico-facing-us-pressure-will-halt-incentives-chinese-ev-makers-2024-04-18/ https://www.reuters.com/business/autos-transportation/mexico...
  - ericmay 2y ago
    > Japanese companies prefer to buy from other Japanese companies. > Mexico is equally nationalistic about Oil Kind of interesting given the broader context isn’t it? I think here in Ohio Honda and LG are working on a joint battery facility too.
rchaud 2y ago
March 2028 is a long time away from now. Plenty of time for political haymaking before reality sets in. In 2017, Foxconn said they would move some production to Wisconsin, and that was enough to pick up $3bn in state tax breaks. 13,000 jobs turned into less than 1,000, and absolutely no hardware was produced. Some of the industrial properties ended up being sold to Microsoft. https://www.jsonline.com/story/money/business/2023/11/10/what-happened-to-foxconn-in-wisconsin-a-timeline/71535498007/ https://www.jsonline.com/story/money/business/2023/11/10/wha...
- thenthenthen 2y ago
  The link you shared gives me a white page. Very interested to read it, since I live 10min walk from Foxconn in Shenzhen and absolutely interested in the history.
- rayiner 2y ago
  The Foxxconn experience illustrates how we got here and why people are fed up with incremental carrots and are clamoring for the stick.
  - alephnerd 2y ago
    We gave the carrot already thanks to the IRA and CHIPS act, and it's paid off. Honda wouldn't be considering expanding it's US manufacturing presence without the billions in IRA subsidizes given to Honda to help their EV transition (eg. moving the Honda Accord supply chain to Ohio in 2023-24) But now is the time for the stick as well, otherwise all the subsidizes spent on IRA would be wasted by parts co-mingling, transshipment, and other loopholes.
WorldPeas 2y ago
funny then that the Honda Passport is the second most 'American-made' car... https://www.cars.com/american-made-index/ https://www.cars.com/american-made-index/
silexia 2y ago
People don't realize that manufacturing WILL come back to the USA with tariffs and that this is a very good thing for our self reliance and self defense. I am just afraid Trump will cave to political pressures and take tariffs down and make "deals" before this happens. Short term pain for long term gain.

39 points by alephnerd 2y ago

And it'll cost more. Trump will say it's a win. But other countries will get cheaper Hondas. American consumers lose out in the end.

alephnerd 2y ago
Honda has been working on moving much of it's supply chain to the US for a long time - they have multiple factories across Ohio and Alabama. In 2023, they announced that they were moving all Honda Accord manufacturing to the US [0], and their prices haven't changed significantly either ($27,615 in 2022 to $28,295 in 2025 compared to median household incomes rising from $74,755 in 2022 to $77,719 in 2023 - 2024 and 2025 numbers aren't out yet). Most base model products won't see significant prices changes due to price elasticity of demand and better in built margins, but mid-upper tier products will see prices soar because the customer base targeted with those products tend to have a greater tolerance to price increases. The biggest pain will be bore by dealerships, as manufacturers finance cars to them at a wholesale rate, and the dealers set the final list price. As such, they will now have to either reduce their margins or see their local demand leave. [0] - https://www.wdrb.com/news/honda-decides-to-move-all-accord-production-to-indiana-manufacturing-plant/article_89d72f98-c356-11ed-b937-e360bf5f6e81.html https://www.wdrb.com/news/honda-decides-to-move-all-accord-p...
- delfinom 2y ago
  I ponder if it's really because sedan sales have been shrinking YoY to this day and the volume has gotten small enough to cram into a existing factory. Based on some data here https://carfigures.com/us-market-brand/honda/accord https://carfigures.com/us-market-brand/honda/accord (which does come from other sources, this was just the basic tablation I could find) the accord sale numbers are half of their peak only a 6 years ago
  - alephnerd 2y ago
    > I ponder if it's really because sedan sales have been shrinking Nope. It's part of Honda's $4-5 billion US expansion as part of their EV and Hybrid car drive [0][1] which also expanded production output. They're moving their cars to a hybrid and electric first model similar to what Toyota began 4-5 years ago. The Biden era IRA subsidizes were the carrot to help restart domestic automotive investments, and the tariffs shock is the stick to force them to capitalize on those instead of trying to co-mingle parts from other non-NAM locations for better margins. [0] - https://alabamanewscenter.com/2022/10/13/what-does-hondas-4-4-billion-ev-expansion-in-ohio-mean-for-alabama/ https://alabamanewscenter.com/2022/10/13/what-does-hondas-4-... [1] - https://www.cnbc.com/amp/2025/02/02/hondas-new-ev-production-revolution-begins-with-1-billion-in-ohio.html https://www.cnbc.com/amp/2025/02/02/hondas-new-ev-production...
rayiner 2y ago
> it'll cost more... American consumers lose out in the end So does minimum wages, worker protections, paid family leave, taxes on corporate income, etc. America isn't just an economy populated by "consumers."
- lazyeye 2y ago
  Yes well said. Although at some point these factories will become almost fully automated. But regardless, better to have them in the US than China.
  - rayiner 2y ago
    Yes they will. But then we’ll have them, and there will be jobs making the robots and maintaining the factories here. Also, when AI replaces knowledge economy jobs, we’ll want the “stuff making robots” in America not China. If AI makes our knowledge industry exports obsolete, then we’ll be really fucked if China has the robots that make stuff.

ZeroGravitas 2y ago

By 2028 they probably won't be able to sell them in Mexico anyway thanks to competition from cheap EVs that the Japanese firms seem bizarrely averse to building. Here's a headline for China last year: > Honda Slashes Gas Engine Production In China After Sales Collapse To Focus On EVs > Honda had a tough year in China, with sales dropping 30.9% to 852,269 units in 2024. This marks the first time in nine years that the Japanese brand has sold fewer than 1 million cars in the country

alephnerd 2y ago
> cheap EVs that the Japanese firms seem bizarrely adverse to building. Because all Japanese car manufacturers are waiting in Idemetsu Kosan to start solid state battery manufacturing by 2027-28, hence why Nissan, Toyota, and Honda all have rollout plans by 2028. Japanese companies prefer to buy from other Japanese companies, as the Japanese government's sovereign fund has voting positions in all these companies. > probably won't be able to sell them in Mexico anyway Most car sales in Mexico remain ICE/Gas driven - overwhelmingly Nissan and GM (Chevrolet) [0]. Not a single EV breaks into the top 50, and the only "Chinese" car that breaks into that list is the ICE MG 5. And if you've ever been to Mexico, you'll see how the Nissan Versa is basically the national car. Mexico is equally nationalistic about Oil, as Pemex is a national institution, and Mexico's oil soverign fund has constantly helped stabilize Mexico's economy [1]. > Here's a headline for China last year Mexico has halted incentives for Mexican automotive manufacturers since 2024 [2]. [0] - https://www.focus2move.com/mexico-best-selling-cars/ https://www.focus2move.com/mexico-best-selling-cars/ [1] - https://www.bloomberg.com/news/articles/2020-04-22/amlo-says-mexico-may-get-6-billion-from-oil-hedge-after-rout https://www.bloomberg.com/news/articles/2020-04-22/amlo-says... [2] - https://www.reuters.com/business/autos-transportation/mexico-facing-us-pressure-will-halt-incentives-chinese-ev-makers-2024-04-18/ https://www.reuters.com/business/autos-transportation/mexico...
- ericmay 2y ago
  > Japanese companies prefer to buy from other Japanese companies. > Mexico is equally nationalistic about Oil Kind of interesting given the broader context isn’t it? I think here in Ohio Honda and LG are working on a joint battery facility too.

rchaud 2y ago

March 2028 is a long time away from now. Plenty of time for political haymaking before reality sets in. In 2017, Foxconn said they would move some production to Wisconsin, and that was enough to pick up $3bn in state tax breaks. 13,000 jobs turned into less than 1,000, and absolutely no hardware was produced. Some of the industrial properties ended up being sold to Microsoft. https://www.jsonline.com/story/money/business/2023/11/10/what-happened-to-foxconn-in-wisconsin-a-timeline/71535498007/ https://www.jsonline.com/story/money/business/2023/11/10/wha...

thenthenthen 2y ago
The link you shared gives me a white page. Very interested to read it, since I live 10min walk from Foxconn in Shenzhen and absolutely interested in the history.
rayiner 2y ago
The Foxxconn experience illustrates how we got here and why people are fed up with incremental carrots and are clamoring for the stick.
- alephnerd 2y ago
  We gave the carrot already thanks to the IRA and CHIPS act, and it's paid off. Honda wouldn't be considering expanding it's US manufacturing presence without the billions in IRA subsidizes given to Honda to help their EV transition (eg. moving the Honda Accord supply chain to Ohio in 2023-24) But now is the time for the stick as well, otherwise all the subsidizes spent on IRA would be wasted by parts co-mingling, transshipment, and other loopholes.

WorldPeas 2y ago

funny then that the Honda Passport is the second most 'American-made' car... https://www.cars.com/american-made-index/ https://www.cars.com/american-made-index/

silexia 2y ago

People don't realize that manufacturing WILL come back to the USA with tariffs and that this is a very good thing for our self reliance and self defense. I am just afraid Trump will cave to political pressures and take tariffs down and make "deals" before this happens. Short term pain for long term gain.