Honda denies reports that it intends to move auto production out of Canada

Honda Canada says it is not planning to move production out of Canada to the U.S., contrary to reports from a Japanese news outlet. 

Nikkei newspaper reported Tuesday that Honda is working on plans to switch some production from Mexico and Canada to the U.S., after U.S. President Donald Trump imposed a 25 per cent auto tariff last month. 

Ontario Premier Doug Ford and a spokesperson for federal Minister of Industry Anita Anand said early Tuesday those reports were not accurate.

Then, in a statement Tuesday afternoon, a Honda Canada spokesperson said the company’s facility in Alliston, Ont., “will operate at full capacity for the foreseeable future and no changes are being considered at this time.”

The spokesperson added domestic sales are up nine per cent in the first quarter of this year, and that the company is “confident in our ability to continue navigating current market conditions effectively.”

Anand said later that she had a “productive” meeting with Honda Canada CEO Dave Jamieson.

Jamieson “confirmed that Honda remains fully committed to its operations in Canada and that there are no plans to shift production elsewhere,” Anand said on social media.

“Canada has the best workers in the world and is a global leader in auto manufacturing. We will continue to work with all auto manufacturers to protect Canadian jobs and to build a strong, resilient auto sector here in Canada.”

‘Total chaos’

According to the Nikkei report, Honda is aiming for 90 per cent of cars sold in the U.S. to be made locally. Honda will examine cutting back on the number of cars exported from the U.S. to Canada and will gradually shift toward local production, the report said.

The company is looking to increase production in the U.S. by up to 30 per cent over two to three years, the newspaper said. 

Such a move would be a major blow to Ontario, which has a large Honda plant in Alliston that was in line to see a massive expansion. 

The U.S. was Honda’s biggest market last year, accounting for nearly 40 per cent of global sales. About two-fifths of the 1.4 million vehicles sold were imported from Canada or Mexico.

Two sources close to the federal government told Radio-Canada this would be a hard blow for the Canadian auto industry. 

Dominic LeBlanc, the federal minister of international trade and intergovernmental affairs, discussed the situation with Ford yesterday, the sources confirmed. 

One government source, who said they have spoken to contacts in Japan, said the $15 billion agreement signed by Honda, Ontario and Canada last year to create a comprehensive electric vehicle supply chain still stands. 

Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, said there’s reason to question the Nikkei report.

“The Honda news appears to be based on a Nikkei report on two and three-year contingency planning. The Japanese plan for plans,” he told CBC News Network. 

“I don’t see Honda in Ontario being affected at the moment.”

The report shows the “total chaos” for auto companies right now as they attempt to plan around Trump’s rapidly changing tariff announcements, said Greg Layson, digital and online editor for Automotive News Canada. 

Automakers are likely planning for the worst-case scenario should the tariffs become permanent, he said. 

“While this [plan] is one that has leaked, I would assume that there are other high level managers at all automakers operating in Ontario considering the exact same thing,” Layson said in an interview with CBC’s Metro Morning on Tuesday. 

Though there’s a risk of auto companies reducing production in Canada and increasing existing production in the U.S., Layson said such moves could take between two to three years, and cost between $2 billion and $5 billion. 

“They have to find the land, the supply chain and … essentially relocate an entire factory,” he said. “That is not easy and it doesn’t happen fast.”