Honda has decided to produce its next-generation Civic hybrid in the U.S. state of Indiana, instead of Mexico, to avoid potential tariffs on one of its top-selling car models, according to three people familiar with the matter.

Honda is scrapping plans to produce its next Civic model in Mexico and moving production to Indiana to avoid President Trump’s upcoming tariffs, according to a report. The Japanese auto giant had initially planned to manufacture the next-generation Civic in Guanajauto,

President Donald Trump’s proposed tariffs on Mexico appear to have impacted Honda‘s plans for its new Civic hybrid vehicles. The automaker is reportedly preparing to move production of its electric Civic model from Mexico to Indiana,

The next-generation Civic hybrid was set to be produced in Guanajuato, Mexico, in 2027, according to Reuters, but will now be based in Indiana beginning in 2028.

To avoid import tariffs on vehicles made in Mexico, Honda Motor Co (NYSE:HMC) will reportedly manufacture the next generation of the Civic in Indiana, sources cited by Reuters said. Honda had initially planned to build the newest model Civic in Guanajuato,