Carmakers are expected to report November sales on Tuesday, and the consensus estimate calls for sales of about 1.2 million cars and light trucks, a gain of 3.6% over November 2012, according to Kelley Blue Book (KBB). The seasonally adjusted annual rate of sales could climb to 15.6 million vehicles sold in 2013, up from 15.3 million a year ago and 15.2 million in October 2013.

Those sales are coming at a price however. Another industry watcher, WardsAuto, has said that dealer inventories totaled nearly 3.4 million vehicles going into November, a 76-day supply compared with a desired supply of around 60 days. That is the highest total since November 2005 and a worrying signal to carmakers.

Ford Motor Co. (NYSE: F) already plans to lower production by scheduling two weeks of downtime at its Focus and C-Max hybrid plants and one week of downtime at its Fusion factory. Cutting production, as Ford plans to do, tends to be the favored approach among analysts and investors. The less-favored approach is keeping production numbers high and piling on the incentives. Ford sales are forecast at 6.2% higher than November 2012.

Toyota Motor Corp. (NYSE: TM) has offered sales at 0% interest for five years in an effort to keep certain models moving off dealers’ lots. Toyota’s November sales are forecast to rise 5.8% year over year in November. For consumers Toyota’s current decision to keep building more cars and offering big incentives to buyers means that there are likely some stunning deals to be found out there.

General Motors Co. (NYSE: GM) has not yet indicated whether it will schedule any downtime this month, but that probably indicates that it has no plans to do so. The company’s sales are forecast to rise 12.1% in November, with the company’s Chevy Silverado and GMC Sierra light trucks continuing to be in high demand.

Honda Motor Co. Ltd. (NYSE: HMC) is more likely than Toyota to match its production to customer demand. Sales growth in November is expected to be 2.1% year over year, and that probably means a slowdown in production.

Chrysler Group is forecast to post a year-over-year sales gain in November of 6.9%, according to KBB. This comment from a Michigan dealer cited at Bloomberg News tells an interesting story:

I’m probably not managing my inventory as well as I do at 8 percent, but I’m willing to roll the dice and stock some inventory in December and January, because I think we’re going to have a great market in February. We’re borrowing money so cheaply.

The federal government shutdown in October did not hamper sales during that month, and November looks to be on a path to even better sales. Now, as long as dealers do not get hit by some other event that leaves that cheap inventory on the lot, carmakers and dealers have a lot to look forward to.

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