Toyota and Honda Coming Up Big In US; GM and Ford Drop Back

This year in the U.S. auto market is looking more and more like a rewind of 2011. Last year, General Motors and Ford, among others, feasted on the lack of availability suffered by Toyota and Honda because of the Big Two Japanese brands' Year from Supply Hell. GM and Ford had just the crop of new small cars that could best take advantage of their foes' problems and steal market share from them.

But now that the impact of the earthquake and tsunami last March, and floods in Thailand last fall, is largely behind them, Toyota and Honda are making up for lost time with a vengeance. Once again this week, when all automakers reported their July sales results for the U.S. market, the two Japanese brands came up big — with year-to-year sales up 26 percent and 45 percent, respectively — while GM sales dipped by 6 percent and Ford by 4 percent.

Toyota ended July once again the industry’s number one retail brand, for the fifth consecutive month, perhaps helped

The timing of the Japanese comeback also is worse for GM and Ford than it looks because the sluggish economy could cause the auto market overall to lose some momentum during the second half, making sales even harder to come by versus the renascent Japanese brands. Pressure will grow on the Detroit Big Two to consider more creative and perhaps more lucrative incentive programs in order to protect their market share in a somewhat softer overall environment, even though this is a "traditional" tool that GM and Ford executives have insisted they don't want to revisit.

And actually, the auto brands faring better than the top four, relatively speaking, are smaller players Chrysler, Hyundai-Kia, Nissan and Volkswagen. They've each picked up significant market share over the last two years. Chrysler's year-over-year sales gains have remained robust, for instance, coampred with GM and Ford's, in part because it's not a significant factor in the small-vehicle market dominated by the Japanese.

Still, Toyota looks to be in an extended time of rebound from its 2010 safety-recall problems and last year's supply difficulties. It also is picking up its previously lagging pace of new-vehicle introductions. In fact, Toyota has just decided to raise its global production target for this year by about 300,000 vehicles, or about 3 percent, to nearly 9 million units due to stronger-than-expected global demand. And Honda also is boosting production, including in the United States.

The overall picture in the U.S. market for the top four brands is looking like several years ago, before the Great Recession, U.S.-government bailouts and other subsequent events roiled things mightily. Toyota and Honda dominated that era, and wouldn't mind going back to the future.