North American production will come up well short of plan in January, thanks to a major under-build by General Motors Corp.

January’s results will force an overall reduction in the industry’s first-quarter outlook despite increases to schedules for February and March.

The January shortfall also appears to fly in the face of the industry consensus that first-quarter demand, especially in the U.S., will outdo year-ago.

January-March North American production plans were cut by 33,900 units, compared with the last revisions made a month ago. Total output now is pegged at 4.202 million units, less than 1% below year-ago’s 4.231 million but still above totals for the same period in 2001 and 2002.

However, the revisions exclude February-March updates from GM, which is expected to revise its first-quarter schedules next week. (See related data: Ward's North American Estimated Production by Manufacturer and Country )

(See related data: Ward’s North American Production Schedule)

The first-quarter cut includes a Ward’s estimated January shortfall from plan of 68,900 units, including a hefty downturn of 52,500 units at GM. Ford Motor Co., Chrysler Group and Honda of America Mfg. Inc. make up most of the remainder in the gap.

Somewhat offsetting the January decline is an increase to February’s schedule of 27,100 units and a 7,900-unit boost in March’s plan.

With all the major manufacturers pulling back on passenger-car production, that’s where the lion’s share – 58,600 units – of the shortfall resides. GM accounts for more than half of that, although Chrysler, Honda and Nissan North America Inc. are heading for noticeable drops too.

GM’s estimated truck shortfall of 18,200 units partially was made up by overbuilds at Chrysler, Toyota Motor Mfg. North America Inc. and Nissan, but the industry still remains on track for a 10,300-unit decline from plan.

The shortfall, though large, is not a sign that sales are drying up. The production cuts are merely a way to fine-tune the inventory to better match up with market demand.

U.S. dealers of North American-produced vehicles came into the month with some 184,000 units more inventory than a year ago. And even with the downward change to production, the revised forecast for Jan. 31 leaves dealers with inventory 120,000 units above year-ago.

GM’s downward adjustment to January seems to be concentrated mostly in slow-selling midsize and large sedans and minivans (being redesigned for mid-year). But it did cut back on overtime at its truck plants compared with December.

Even with the shortfall, GM’s inventory will end the month an estimated 6% above like-2003. GM might be aiming to turn the tide of the last two years by not ending up with a lot of ’04 models to unload over the summer at drastically reduced prices before the ’05s go on sale, and thereby not undercut the value of some new and redesigned vehicles it has coming next fall.

The revised inventory forecast for domestically made light vehicles is 3.18 million units, 3.9% above year-ago. Days’ supply is forecast at 90, identical to year-ago.