TOKYO — Honda is considering shifting production of its U.S.-bound Fit subcompact cars to Japan from Mexico in a few years, partly due to a new North American trade agreement, two people familiar with the situation told Reuters.

Fit cars for export to the United States are now made at Honda's auto plant in Celaya, Mexico. The Celaya plant also makes HR-V sport utility vehicles (SUVs) for the U.S. market. A Honda spokesman said the company had not made any decisions on Fit production.

The new trilateral trade deal, which replaces the 1994 North American Free Trade Agreement (NAFTA), is set to raise the minimum North American content for cars to qualify for duty-free market access to 75 percent from 62.5 percent.

U.S. President Donald Trump wants the deal to shrink the U.S. trade deficit by curbing imports into the United States and boosting production of foreign-branded vehicles there.

But the terms of the trade deal reduce Honda's incentive to produce the Fit in Mexico for the U.S. and European markets, said the sources, one of whom has direct knowledge of the plan and the other who was briefed on it.

They declined to be identified as the matter was still confidential.

In addition, they said, U.S. consumers are increasingly shifting to SUVs, making it more advantageous for the Mexico plant to build those, rather than subcompacts.

One of the sources said that if Honda decides to shift production, it would come when the company launches its next Fit model in the next few years.

Reporting by Maki Shiraki

https://www.autoblog.com/2018/10/26/...-mexico-japan/

 

I respect others opinions, but I see this as potentially good news. It's hard to beat a Japanese car made in Japan.

In general, I try to buy American cars made in the US, Japanese cars made in Japan, and German cars made in Germany.

The exception to that rule is probably Toyota. They seem to do a darn good job building cars in the US.

 

Toyota's USDM only Minivan /Pickup /SUV models are pretty sought after in this country.
Does Honda not have a plant in the USA?

 

Not clear on what the benefit would be to Honda.
If the crux of the movement of production is based on this change, " raise the minimum North American content for cars to qualify for duty-free market access to 75 percent from 62.5 percent. " How does moving production from Mexico to Japan help? Last time I checked Japan wasn't in North America.

I could see Honda doing it, just because the Fit, "Jazz" is actually a pretty popular model, in Europe and Asia. If North American demand is declining? Why not move Fit production to Japan and concentrate the Celaya plant production on the HR-V.

But the move doesn't seem to really make sense based on the framework of the new trade agreement.

 

The VAST majority of Honda's sold in the US are made in the US. We have 4 plants. Between them they produce the Civic, Accord, CR-V, RDX, Odyssey, Ridgeline, Pilot, MDX, NSX, ILX, and TLX.

About the only Honda's sold in the US that are not made in the US are the Fit, HR-V, and Civic Hatchback.

 

To me they are saying that production of the Fit is only happening in Mexico to take advantage of the current trade agreement. If they have to pay import like tariffs, they might as well bring them over from Japan and dedicate the Mexico plant to HR-V's. I'm sure that only producing one vehicle in one plant allows more efficiency. I believe the Fit plant in Japan only produces Fit's.

Makes sense to me. Make HR-V's in one plant and make Fit's in another.

 

The move may bode well, as the quality of the Fits coming out of Japan is unquestioned.
Given Honda's recent brand quality ratings (middle of the pack) and the CEO's claim to an emphasis on better quality and value, will the next gen Fit be the paradigm? In other words, are my hopes being set up for a pleasant surprise or a general disappointment?

 

I've owned, or my parents owned, a number of Hondas assembled in Japan:

06 del Sol
03 Hybrid
12 Fit

These were all top-quality cars, build-wise. I can't claim any car is flawless, but they did seem to be constructed to a higher standard than the 01 Odyssey (US) or 04 CR-V (England). Over time I've developed the belief that it's not just the assembly, but the quality of local suppliers. Of course, to some extent suppliers are mixed geographically, but I believe most OEMs shorten their supply chain so that as many parts as possible are produced nearby. IMHO, there is a culture of "pride in the product" that exists to some degree among workers everywhere but is very strong in Japan. I cannot remember off the top of my head which plants those all came out of; I believe one of them rolled off the same line as the NSX of the day.

I read the move as, it made sense to make the Fit in Mexico before the requirement, and now it does not -- the margins are too thin to support the tariff. SUVs carry a higher margin -- aside from the AWD, there's very little that makes the HRV more expensive to make than the Fit. But I'd also read this as: There's no way it's cheaper to make a Fit in Japan than in the US, so plan on the next gen Fit getting a little price bump and maybe thinner inventories (like the GE).

 

I think on my window sticker the NA content was 70%. Perhaps cheaper to move it back to Japan then to get the content up to 75%? They'd prolly have to start making transmissions in Mexico to make that jump...