Japanese car producer Honda will produce a car model at its US facility instead of its domestic facility from as early as June, the company told Argus today, possibly to avoid the US' tariffs on foreign car deliveries.
Honda will stop manufacturing the Civic Hybrid 5-door model at the country's eastern Yorii plant during June-July and switch the production to its US plant in the state of Indianna, the representative of the firm told Argus. Honda produced 3,000 units of the model during February and March, he added.
This comes as part of the company's mid-to long term "optimisation strategy", according to the firm, reiterating that theproduction switch is not a countermeasure against the US' across-the-board 25pc tariff on automobile imports that took effect on 3 April.
But this may not be entirely convincing since Honda just started producing the model in February, leaving room for speculation that the transfer is part of a wider strategy to reduce delivery costs to the US market.
Honda did not disclose whether the Indiana plant will procure auto parts from its suppliers in Canada or Mexico.
Japanese auto industry is still bracing for further developments in the US tariff policy on automobile and auto parts, although US president Donald Trump on 14 April suggested possibly pausing the tariff.
Tokyo and Washington will hold a ministerial talk this week to negotiate trade issues, including the levy on auto delivery, along with the 24pc "reciprocal" tariffs the Trump administration separately imposed on Japanese imports.
Japanese government is hoping to negotiate for a better tariff deal during the 90-day pause on the reciprocal tariff imposition by the US government, and the automobile industry is seen as a key sector to settle the deal.
The US president has long expressed his dissatisfaction against the auto trade imbalance between two countries. Japan exported around 1.3mn units of passenger vehicles to the US in 2024, while Japan purchased around 23,000 units of US passenger vehicles in 2023.
