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The U.S. auto industry is likely to set a record for industry sales in 2016, before declining slightly next year in part due to bloated inventory that is already beginning to impact Detroit Three production, according to one forecasting firm.

IHS Markit predicts the U.S. auto industry will sell a record number of vehicles this year, surpassing 2015’s record of 17.47 million sold. For 2017, it is lowering forecasts to 17.37 million from an earlier predicted 17.5 million in part because of rising inventories and automakers’ use of incentives.

Fiat Chrysler Automobiles NV and Ford Motor Co. were the most recent automakers to confirm Tuesday that downtime is coming to some plants in early January.

Ford will halt production at its Kansas City Assembly Plant in Claycomo, Missouri, home to the Ford F-150 and Ford Transit, for the week of Jan. 2, according to a UAW Local 249 Facebook post that was confirmed by the automaker.

Fiat Chrysler said it would halt production at its two Canadian assembly plants for less than one week. The comes after the automaker completely cut mainstream car production in the United States in recent months.

The Italian-American automaker on Tuesday confirmed assembly plants in Windsor and Brampton will be down Jan. 3-6, a four-day extension to the Jan. 2 observation of New Year’s Day. The roughly 9,000 hourly workers at the plants, including more than 5,600 in Windsor, will be on temporary layoff.

The Brampton Assembly produces the Dodge Charger and Challenger as well as the Chrysler 300 for Fiat Chrysler — all large cars that have experienced flattening sales. But Windsor Assembly produces the automaker’s minivans, including the all-new Chrysler Pacifica that began production in February.

Ford’s Kansas City Assembly employs nearly 7,500. Most will be on temporary layoff following the Jan. 2 holiday until the week of Jan. 9. Some workers on “Crew C” are scheduled to return Jan. 6, according to the local union’s post. Employment numbers for each crews were not available.

General Motors Co. confirmed on Monday that five U.S. assembly plants will take temporary downtime in January to deal with inflated car inventory. That stood at 105 days at the end of November. It also will cut the second shift in March and nearly 1,300 jobs from its Detroit-Hamtramck Assembly Plant, and in January will eliminate the third shift from the Lansing Grand River Assembly Plant and Lordstown Assembly Plant in Ohio.

UAW Vice President Cindy Estrada, in a statement, said the union is working with GM on job placement at other GM factories for those affected by the shift reductions.

“The union has begun discussions with GM management to identify those opportunities,” she said in a statement. “The International UAW will work with the UAW’s regional offices and local unions to communicate to the impacted members their benefits and options while they are laid off.”

The company and union are working to fill the more than 800 people slated for layoffs at Lansing Grand River into open jobs at Lansing Delta Township and at GM plants in Flint, Saginaw and Bay City, according to a source familiar with the automaker’s plans who asked not to be identified because the plans have not been made public.

GM also has announced it will add a third shift next month and 650 jobs at its Spring Hill Assembly Plant in Tennessee to help keep up with SUV demand.

Ford, which believes U.S. auto sales have plateaued, over the past year and a half has trimmed inventory by cutting shifts and production. It eliminated a shift at its small-car Michigan Assembly Plant in Wayne in June 2015 and announced downtime at several plants this fall to trim inventories on cars, trucks and SUVs.

At the end of November, the U.S. auto industry had nearly 4 million vehicles in inventory, or a 72 days supply, according to IHS. Automakers typically want to see a healthy level of between 60 and 65 days supply, IHS says.

The industry has 250,000 or 260,000 units of excess inventory “that kind of needs to be weaned from the system,” said Joe Langley, IHS principal analyst for North America light vehicle forecasting.

“Ford has been incredibly proactive through the year in trying to manage inventory and fleet and take downtime and adjust according,” Langley said. “GM has let this swell to a point that now they have to take more considerable actions leading into the new year.”

IHS predicts some growth beyond next year and has increased its forecast by about 100,000 units each for 2018 and 2019, when sales are estimated to hit 17.56 million and 17.53 million, respectively.

Hopson said the boost is based on beliefs that “consumers can benefit” from some expected policy changes around infrastructure and tax cuts that will come under President-elect Donald Trump’s term.

mburden@detroitnews.com

(313) 222-2319

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