Toronto, Ontario – In this weekly Tuesday Ticker, Toyota debates moving RAV4 production exclusively to the U.S., while Honda also makes a similar move pushing Civic Hatchback Hybrid Production to the United States.
The Toyota turntables
Toyota is reportedly reevaluating its manufacturing plans for the next-generation RAV4, its top-selling model, with a potential shift in production strategy aimed at minimizing tariff expenses. According to a Reuters report, the automaker is exploring the option of assembling the upcoming RAV4 in Kentucky to sidestep the financial burden of U.S. import tariffs.
Currently, RAV4s are built in Kentucky, Canada and Japan. Initially, Toyota intended to scale back Kentucky production for the next model, relying more heavily on imports from Canada and Japan. However, three sources familiar with the situation told Reuters that the company may be reversing course in response to former President Donald Trump’s 25 percent tariff on imported vehicles.
The idea is still under consideration and has not been finalized. Should Toyota move forward with this change, significant investment in retooling and supply chain adjustments would be required, processes described as both costly and time-consuming. If approved, domestic production of the next-gen RAV4 in Kentucky wouldn’t begin until 2027.
Honda's hijinks
Honda is set to centralize production of its Civic Hatchback Hybrid, shifting all manufacturing to its Indiana Auto Plant in Greensburg and phasing out production in Japan. While the hybrid model is currently built in both countries, Indiana will take over as the exclusive production site later this year, according to spokesperson Eric Mauk.
The news comes after Honda promised to keep its current production ongoing within Canada. The Civic Hatchback Hybrid has never been built in Canada–it was only built in Japan.
Priced from around US$27,000, the Civic Hatchback Hybrid is a semi-electric variant of Honda’s well-known Civic and was recently honoured as the 2025 North American Car of the Year.
This decision is part of a broader movement within the auto industry as manufacturers restructure global operations to better navigate shifting U.S. trade policies and tariff risks. Though Honda has yet to confirm further changes, previous reports suggest the company may also relocate Civic production from Mexico to Indiana to avoid potential tariff exposure.
