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. The company is lowering its 2017 forecast from 17.5 million to 17.37 million due to rising inventories and increased manufacturer incentives.
At the end of November, the U.S. auto industry had nearly 4 million vehicles in inventory, or a 72-day supply, according to HIS, a bit higher than a healthy level of between 60 and 65 days supply.
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.