All About Japan Autos

Could the automotive market finally be on the road to recovery.

“July was one of the strongest months for U.S. auto sales since taxpayers subsidized last summer’s cash-for-clunkers buying spree,” reports The Washington Post.

While sales numbers were up overall, not every car maker ended the month a winner. Reuters calls the trend “an uneven recovery that left Toyota Motor Co and Honda Motor Co sputtering with declines from strong results a year ago.”

In contrast to last year, domestic automakers saw strong sales. “General Motors Co., Ford Motor Co. and Chrysler Group LLC reported slightly higher U.S. sales in July compared to the prior month and a year ago, helped by both an uptick in consumer buying and purchases by commercial fleets,” writes The Wall Street Journal.

Ford saw its sales rise 3.11 percent compared to last July, and the Chrysler Group saw its sales up 4.96 percent. The big winner of the Big Three, however, was GM, with a 24.58 percent increase in sales over July 2009 in its four core brands. “Even with the loss of four marques (Saturn, Pontiac, Hummer and Saab), GM managed to outsell the company’s entire portfolio of eight brands from last July by 5.41 percent,” points out Autoblog.

An interesting twist in the sales figures are the types of vehicles that saw strong sales in July. Whereas the sales bonanza of July 2009 was driven by smaller, inexpensive cars (due to the Cash for Clunkers program), July 2010 saw a return in sales of family cars, crossovers and luxury vehicles. Kicking Tires reports, “Honda saw sales overall fall from last year, mainly because its big sellers Accord and Civic took hits, down 17.9% and 25.5%, respectively. The small Fit was also down 29.8%, but the Odyssey minivan and Pilot SUV saw big spikes of 37.8% and 45.4%, respectively despite starting prices around $27,000.” Also, “Ford’s inexpensive Focus compact car sold especially well during Cash for Clunkers but saw sales fall 29.4%. But sales of the Ford Edge and Explorer SUVs rose 18.9% and 53.2%, respectively despite redesigns of both heading to dealers later this year.”

“Blame the shift in consumer tastes to pent-up demand for utility vehicles, higher used car prices and, as always, lower gas prices,” says Autoblog. “Still, we can’t help but cringe at the site of large vehicles, be they trucks, SUVs or CUVs, selling well, knowing that gas prices are cyclical and another spike in the price of oil could be right around the corner.”

What does this all mean for car buyers? With sales up overall, it might be tougher to negotiate a great deal — particularly if you’re looking for a family sedan, truck or SUV. If you’re looking for a deal, concentrate your shopping on small cars that aren’t selling well. Dealers may have excess inventory they’re anxious to get rid of — especially since the 2011 models are starting to ship out.

If you’re in the market for a new car, check out the U.S. News rankings of this year’s best cars as well as this month’s best car deals.