Honda to invest $3 billion in new vehicle assembly plant in Ohio

A Honda sedan moves down the assembly line on Jan. 28, 2025 at the automaker's assembly plant in Marysville, Ohio. Michael Wayland / CNBCMARYSVILLE, Ohio — Honda Motor plans to invest $3 billion to build a new assembly plant in Ohio, the automaker announced Monday.Honda said the new plant, which is near its other facilities in Marysville, Ohio, is expected to begin production in 2029, have a capacity for 240,000 vehicles annually and create more than 2,000 jobs. The facility is expected to focus on hybrid vehicles, which have been growing in popularity in the U.S., but Honda said it will be capable of making traditional gas-powered vehicles and electric vehicles as well. The plant is expected increase Honda's light-duty vehicle capacity to 1.3 million units annually in the U.S. It currently has 12 manufacturing plants in United States, eight of which produce engines or automobiles. It's the company's first new mass production U.S. vehicle assembly plant since it opened a facility in Indiana in 2008.The auto industry has been trying to localize more production amid President Donald Trump's tariffs and inflated logistics costs that have cut into profits.Honda's plans for a new plant come roughly two weeks after Volkswagen-owned luxury brand Audi announced it would invest more than $4 billion in its first U.S. manufacturing facility in Georgia.Detroit automakers General Motors and Ford Motor plus international automakers Toyota Motor and Hyundai Motor also recently said they will spend billions of dollars on new or updated U.S. facilities.Honda's announcement comes after the automaker in May indefinitely suspended an $11 billion investment plan to produce all-electric vehicles and batteries in Canada. It also canceled three planned EVs for the U.S. market.The new Ohio plant is expected to notably boost Honda's U.S. production and American-produced sales. Honda said nearly all of its vehicles sold in the U.S., including its Acura luxury brand, were produced in North America, including more than 60% in the U.S.American Honda Motor Co. executive Jennifer Thomas recently emphasized the Japanese automaker's commitment to the U.S. and need for additional capacity."In order to be competitive in this market, you're going to need to build products here," Thomas, senior vice president of corporate affairs, said Oct. 27 in Detroit. "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."Thomas also warned the automotive industry faces a "catastrophic" scenario if the U.S. and Canada cannot reach a new trade deal by the end of this year, when Trump has threatened to double tariffs on Canadian vehicles and parts from 25% to 50% on Jan. 1 if the two countries don't reach a deal.Honda said it has built more than 33 million vehicles and more than 39 million engines in the U.S. since it started auto production in the U.S. in 1982.The Japanese automaker currently has more than 30,000 employees in the U.S.