Honda to Make 90% of US Sales Locally by Relocating Mexico, Canada Production, Nikkei Reports

Honda to Make 90% of US Sales Locally by Relocating Mexico, Canada Production, Nikkei Reports

April 15, 2025

Tokyo, Japan — Honda Motor Co. plans to manufacture 90% of its vehicles sold in the United States within the country by 2026, according to a report by Nikkei Asia. The Japanese automaker is reportedly shifting a significant portion of its production currently based in Mexico and Canada to U.S. factories, a move aimed at strengthening its supply chain and reducing exposure to trade volatility.

The strategic relocation will involve consolidating North American manufacturing operations, with select models previously built in Canada and Mexico now being assembled at Honda’s existing U.S. plants. Sources cited by Nikkei say the transition will begin later this year and ramp up through 2026.

Honda currently builds around 70% of its U.S.-sold vehicles domestically. By raising that figure to 90%, the company seeks not only to align with rising demand for locally manufactured products but also to optimize logistics amid ongoing global supply chain challenges.

The shift is also seen as a response to evolving U.S. trade policies, labor costs, and the Biden administration’s push for domestic manufacturing, particularly in the auto sector. While Honda has not officially commented on the reported move, industry analysts suggest the plan may also be influenced by incentives embedded in the Inflation Reduction Act and other clean energy initiatives that reward U.S.-based production.

Honda operates major assembly plants in Ohio, Alabama, and Indiana. The company has invested heavily in electric vehicle (EV) production, including a $3.5 billion joint venture with LG Energy Solution to build an EV battery facility in Ohio.

The relocation is not expected to eliminate jobs in Mexico or Canada entirely, but rather to rebalance production capacity across the continent. However, some adjustments in workforce levels or production lines in those countries could occur as the transition unfolds.

Honda's decision echoes a broader trend among global automakers seeking to regionalize production in response to both economic and geopolitical pressures. As the U.S. market remains a key driver of Honda’s global sales, this localization strategy could strengthen its competitive position while ensuring greater resilience in the face of future disruptions.

Further details about the reorganization and specific models affected are expected in the coming months.