The U.S. auto tariffs continue to make themselves felt in the industry. Honda has just announced that it will transfer the production of CR-Vs intended for the American market, models that are manufactured in Alliston, Ontario, to its plants in the U.S. In return, it will increase production in Ontario of CR-Vs destined for other markets.
Honda says the move is to minimize the impact of tariffs, no surprise there. The company already produces the CR-V in the United States (in Greensburg, Indiana, and East Liberty, Ohio). It will have to increase production capacity within those two plants.
Honda is making the same adjustment with its Civic hatchback, production of which is shifting from Japan to the U.S. That model could soon be more expensive here in Canada as a result.
The company is currently studying different scenarios to cope with auto tariffs. It forecasts a 60-percent drop in its profits this year, with an expected impact of $4 billion USD due to U.S. tariffs.
The Japanese automaker reiterates, however, that jobs and production will be maintained in Canada. We will have to see how.
EV plant pushed back
Honda also announced it’s postponing its plan to build new electric vehicle plants in Ontario, which is another major blow to the Canadian automotive sector.
The company says the postponement is for a period of two years. We shall see.
Last year, the company announced it would invest nearly $15 billion CAD in its North American electric vehicle supply chain. The project included the construction of a battery plant in Alliston, as well as another plant that was to begin producing electric vehicles in 2028.
Honda says the postponement is not due to any tariff issues, but rather to lower than expected demand for electric models. Whatever the reason, the decision is hard to swallow.