U.S. auto sales dip in December; 2016 to set record: JD Power and LMC

DETROIT (Reuters) - U.S. auto sales will probably decline slightly for December as consumers keep snubbing sedans despite record consumer discounts, industry consultancies J.D. Power and LMC Automotive said on Thursday in a forecast that highlights the pressure on Detroit automakers.

While U.S. auto sales for all of 2016 could eke out a record, Power and LMC forecast manufacturers' discounts offered to close sales would hit a record high of more than $4,000 per vehicle in December. The consultancies estimated sales at 17.5 million vehicles on a seasonally adjusted annualized basis this month, flat with a year ago.

Detroit automakers are moving to cut production of certain vehicles, particularly small and mid-sized sedans, as they concede that the market is hitting a plateau where the cost of pushing additional sales in of certain cars outweighs the potential profit.

General Motors Co plans to lay off 3,300 workers indefinitely at three U.S. car factories.

Ford Motor Co and Fiat Chrysler Automobiles NV have ordered temporary cutbacks at several factories. Fiat will extend a Christmas shutdown by one week at the Windsor, Ontario, plant that builds its new Pacifica minivan and at a Brampton, Ontario, factory that assembles Chrysler 300 and Dodge Challenger sedans.

The speed that U.S. consumers, emboldened by cheap gasoline, have turned their backs on small cars to embrace larger sport utility vehicles and pickups has caught Detroit automakers flatfooted.

Light trucks, including SUVs, have surged to 59 percent of the total U.S. light vehicle market for the first 11 months of 2016, compared with 52 percent in the comparable 2014 period. That tilt has forced cutbacks at factories dedicated solely to car production when oil prices were high, such as GM's Lordstown, Ohio, plant, which will lay off workers on its third production shift next month.

How close automakers come to beating a full-year sales record will depend on both consumer demand and the companies' decisions on how many vehicles they sell to rental car fleets.

In 2015, U.S. sales totaled 17.39 million vehicles, according to WardsAuto, and 17.47 million, according to Autodata. The two consultancies differ on the number of large trucks they include in the "light vehicle" sales figures they report.

In a separate forecast, TrueCar Inc's ALG automotive consultancy said December sales would fall 2.6 percent to a seasonally adjusted annualized rate of 17.41 million vehicles.

(Reporting by Bernie Woodall and Joseph White; Editing by Frances Kerry and Lisa Von Ahn)