Honda plans to invest $3 billion to build a new vehicle assembly plant in Ohio, according to an announcement. The automaker said the new plant, which will be located near its other facilities in Marysville, Ohio, is expected to begin production in 2029. It will have an annual production capacity of 240,000 vehicles and create more than 2,000 jobs.
The facility is expected to produce vehicles powered by traditional internal combustion engines, as well as all-electric and hybrid models, which have been growing in popularity in the U.S.
The plant is expected to increase Honda’s U.S. light-duty vehicle production capacity to 1.3 million units annually. The company currently operates 12 manufacturing plants in the United States, eight of which produce engines or light-duty vehicles.
“This is not simply an investment in another plant. It is an investment in the future of Honda manufacturing in America,” Bob Nelson, executive vice president of American Honda Motor, said during the announcement at the company’s U.S. heritage center in Ohio.
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The auto industry has been looking to localize production as President Donald Trump’s tariffs and rising logistics costs put pressure on profit margins.
Nelson told CNBC after the event that tariffs were affecting the company’s business, but said the new plant was primarily driven by Honda’s ambitions to expand its U.S. operations.
“Tariffs are an impact to us, even with the high localization rate that we have,” he said. “But the real impact is that we have customers out there wanting Honda product and we can’t give it to them. That’s the real area.”
Nelson said Honda did not work with the Trump administration ahead of Monday’s announcement.
The announcement follows German automaker Audi’s plans to invest $4.2 billion in its first U.S. vehicle assembly plant in Georgia. The facility is expected to produce 200,000 SUVs annually and create approximately 4,500 jobs. Trump announced the investment at a campaign rally in Perry, Georgia, on Oct. 24. The proposed factory will be located near Macon and is expected to manufacture some of Audi’s largest and most premium sport utility vehicles for the North American market.
Honda’s new facility will be the company’s first new mass-production vehicle assembly plant in the U.S. since it opened a facility in Indiana in 2008. The automaker also opened a $70 million performance vehicle facility in 2016 and a multibillion-dollar joint-venture battery plant earlier this year, both in Ohio.
The latest investment comes after Honda indefinitely suspended an $11 billion plan in May to produce all-electric vehicles and batteries in Canada. It also canceled three planned EV models for the U.S. market.
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Jennifer Thomas, senior vice president of corporate affairs at American Honda Motor Co., said the company needs to expand domestic production to remain competitive.
“In order to be competitive in this market, you’re going to need to build products here. We are focused on trying to maximize the existing capacity that we have, but we are at capacity, and so we’re exploring all options,” she said.
Thomas also warned that the automotive industry faces a “catastrophic” scenario if the U.S. and Canada fail to reach a new trade agreement by the end of this year. Trump has threatened to double tariffs on Canadian vehicles and parts from 25% to 50% on Jan. 1 if the two countries do not reach a deal.
Honda said it has built more than 33 million vehicles and more than 39 million engines in the U.S. since beginning automobile production in the country in 1982. The company employs more than 30,000 people in the U.S.