Honda Is Considering Building An Eighth Factory In North America
Honda’s manufacturing presence in North America may continue to grow. CEO Toshihiro Mibe stated that Honda is considering building an eighth assembly plant in the region. This move would deepen the company’s local commitments at a time when its existing facilities have almost exhausted their expansion potential.
During an interview with the Japanese publication Yomiuri Shimbun earlier this week, Mibe noted that the seven Honda plants operating in Canada, the United States, and Mexico have a total annual production capacity of 1.67 million vehicles. As production volumes approach this limit, he emphasized the importance of creating a “buffer” that would allow the company to ramp up production when necessary.
“Production is almost at full capacity,” Mibe said. “If you don’t have a buffer, you can’t restore production.”
According to GlobalData, Honda’s plants in Ohio, Indiana, and Alabama are operating at 85% of their combined capacity of 1.2 million vehicles. The overall capacity utilization rate in North America is about 90% of the maximum of 1.8 million units, Autonews reports.
Tariffs And Local Production Strategy
According to Mibe, current tariffs make it difficult for the company to generate profit in the United States, and the best way forward is to “produce where there is demand.” Today, North America accounts for over 40% of Honda’s global sales, and Mibe stated that he wants to “significantly increase” sales in the region without specifying by how much.
American Honda plans to achieve over 9% of the U.S. market share in 2026 and expects to outpace the overall industry dynamics.
Abandonment Of EVs And New Plans
Honda’s commitment to North America comes despite a costly decision made earlier this year to abandon the 0 Series electric vehicle lineup and terminate the joint venture with Sony to launch the Afeela brand. Mibe believes that canceling the development of these new models was “generally correct” and says the company will “try to implement the learnings” gained from the partnership with Sony into future Honda products. Two months ago, Honda also abandoned plans for a $15 billion electric vehicle and battery production center in Ontario, Canada.
“The possibility of increasing capacity is always considered for the future growth of our automotive business in North America,” a Honda spokesperson added to Auto News. “However, no decisions regarding a new plant in the U.S. have been made yet.”
Future Models And Hybrid Strategy
Future plans for North America include a large hybrid SUV, expected to launch in 2029. Despite stepping back from many electric vehicle plans, Honda is not abandoning the technology entirely. The company has confirmed work on a new flexible architecture that will support both hybrids and electric vehicles. Several next-generation models are planned, and the company intends to redirect a significant portion of its Ohio capacity to produce gasoline and hybrid vehicles.
Honda’s decision on a possible expansion of production capacity in North America is a strategic move amid growing demand and trade restrictions. Abandoning large-scale EV projects, such as the 0 Series and Afeela, indicates the company’s pragmatic approach, aiming to minimize financial losses while keeping a focus on hybrid technologies as a more stable and profitable direction in the short term. Plans to produce a large hybrid SUV in 2029 point to a long-term bet on this segment, which is in high demand in North America. At the same time, by leaving the door open for future electric vehicles on a new flexible platform, Honda is trying to maintain a balance between current market realities and future technological trends.