Steel Markets

Ford, GM, and FCA Curtailing Production in January

December 22, 2016

Surplus automotive inventory is causing major auto manufacturers to extend holiday shutdowns into January.

General Motors announced yesterday that it will idle five US auto assembly plants in January for periods of one to three weeks in an effort to reduce oversupply of sedans.

Ford Motor Company said it will shut operations down at the Kansas City Assembly plant during the first week of 2017 in response to high truck and van inventory. The time will be used to perform maintenance at the facility.

FCA will idle two of its Ontario plants from January 3-6 following the New Year’s Day holiday. A spokesperson for the company said the break will help to align production with demand.

Edmunds.com is expecting December sales to be down 0.3 percent year over year for an estimated seasonally adjusted annual rate of 1,629,011 vehicles. Automakers are still on track to inch past last year’s record sales by perhaps just 5,000 units, said Edmunds. Sales during the final week of December generally take a jump which will help push the sales total over the mark.

IHS Markit is lowering its forecast for number of vehicles sold in the U.S. during 2017 to 17.37 million from 17.5 million citing rising inventories and use of incentives by automakers.

The announcements by the automakers echo observations by steel service and distribution centers that auto sales are beginning to slow.