Report: Honda Considering New Factory in North America

Honda is allegedly considering establishing a new facility inside North America to help satisfy regional demand.

CEO Toshihiro Mibe recently told Japanese outlet Yomiuri Shimbun that the automaker was mulling over building another factory for what has historically been its largest market by volume. This would be the company’s eighth production facility in the region.

Mibe noted that Chinese sales have been declining for Japanese nameplates as domestic brands have continued to gain momentum. Considering that North America still accounts for over 40 percent of Honda’s global business, leadership wants to make sure the area is given special attention so as not to lose market share.

This is especially relevant considering the company recently apologized to shareholders for enduring its full-year net loss since 1957. However, it should be noted that 2025 represented a difficult period for numerous brands and often for the same reasons. For Honda, it was pretty clear that betting big on China and battery-electric vehicles had backfired.

The latter issue also complicated Honda’s factory planning, which formerly included establishing a new EV plant in Canada. This no longer seems like something the automaker is interested in doing, with leadership now leaning more toward hybridization as a way to satisfy emissions requirements.

While that could happen at the indefinitely stalled site in Alliston, Ontario, Honda has not confirmed this — stating that it would be willing to review the fate of the facility in a couple of years.

Considering what the CEO told Yomiuri Shimbun, it also sounds like the United States may take precedence over Canada due to it being the larger market and concerns over tariffs. President Donald Trump now wants to place the USMCA under annual reviews, potentially weakening the regional trade agreement to a point where having final assembly located in Canada may not be enough to avoid U.S. tariffs.

That’s an unlikely, albeit not impossible, scenario. But automakers don’t typically like to spend billions of dollars without there being a level of certainty. We imagine that sentiment has only grown following the industrywide fiasco involving the attempted pivot to EVs. In fact, the CEO made that pretty clear during the interview.

"The former Biden administration in the United States proposed very strict emission regulations, and if it could not respond, there was a risk that Honda would have to withdraw from the North American market. In 2024, the development of the EV was completed and preparations were made for production. However, on September 25th [after the inauguration of the Trump administration], the EV purchase subsidy was abolished. I thought that the era of EVs would not come in the United States for 5 years. If you continue to force yourself to sell, the deficit will accumulate. Considering the situation at that time, there was no way to avoid [canceling development of EVs],” Mibe explained in Japanese.

With the car businesses showing signs of strain on numerous markets, the United States failing to embrace all-electric models, implementing new tariffs, and hybrids growing in popularity as fuel prices rise, Honda’s options seem somewhat limited. Even though the company does make small, affordable models that are designed to cater to places that aren’t North America, the U.S. remains its bread and butter.

"The four-wheel business is struggling in China and Asia. The United States is one of the regions to grow. Civic and Accord [Hybrid] are doing well, and I want to build up the number of sales a lot in the future,” said the CEO.

That leaves the brand thinking about regional capacity. Automotive News, which also covered the rumored factory, noted that GlobalData showed the Honda’s U.S. factories operating at 85 percent of their maximum output. Combined with plants located in Canada and Mexico, that number rises to about 90 percent. Even though some of those lines could be repurposed, there’s not a lot of wiggle room and leadership is well aware of that fact.

"[North America is] almost in full production,” Mibe explained. “If you don't have [leeway], you can't recover production.”

That said, there’s nothing beyond this singular interview suggesting that there’s a new factory being planned. Nothing was said about a possible location or what exactly would be manufactured. Even if it makes sense for Honda to break ground somewhere specific, we doubt very much that anything has been decided. This means the construction of any physical buildings will probably be years away, with the subsequent vehicle production being even further out.

[Images: Honda]

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