Japan's tsunami crisis bottomed out in July for Toyota Motor Sales U.S.A. and American Honda Motor Co. as the pair lost 6.9 points of market share to their Detroit and Korean rivals compared with a year ago.
In a flat market, Toyota and Honda got hammered in July. But they are starting to restock U.S. dealerships, and August should be marginally better for both.
That's OK with Don Johnson, General Motors' U.S. sales boss, who says more Toyotas and Hondas on the ground will bring more buyers back into a still-fragile market.
"A lot of brand-loyal customers have chosen to sit on the sidelines" until selection and price improve," Johnson said. "They will be coming back into the market."
Sales in July rose a tepid 0.9 percent to 1.1 million light vehicles, the third straight lackluster month after 8 months of double-digit growth.
But while Toyota and Honda hit bottom, at a combined July share of 19.9 percent, the combined Detroit 3 share was up 3.9 percentage points from July 2010 to 47.6 percent, and Hyundai and Kia gained 1.4 points from a year ago, to a combined 9.9 percent share.
Sales plunged 28 percent for American Honda, which had a 28-day supply of vehicles at the end of the month. Toyota Motor Sales, with a 34-day supply on Aug. 1, was down 23 percent. Sales fell 9 percent for Subaru of America, which was also hampered by the quake. Subaru ended July with a 19-day supply.
But supplies for the Japanese are moving toward normal levels. Toyota is increasing output in Japan and plans to run its North American plants overtime to rebuild dealer inventories.
Ray Tanguay, head of Toyota's North American manufacturing operations, says the plants will run at 110 percent of capacity through September.
Toyota dealer Al Hendrickson Sr. in Coconut Beach, Fla., noticed that new-vehicle shipments started to increase in July. Immediately after the quake, he bought as many new Toyotas as he could find and increased used-car volume.
"With those cars in hand, we stopped all advertising and we slow-walked through May and June," he said.
Hendrickson and his partner/son Al Jr. took a gamble by resuming advertising July 1 on Toyota's promise to increase shipments during the month.
"Thankfully they did," he said. "We don't have as many as we want, but we have as many as we need."
But Toyota's U.S. dealer stocks probably won't reach year-earlier levels before December and Toyota may not hit a monthly year-over-year sales increase until 2012, said Randy Pflughaupt, group vice president of sales administration.
American Honda restored full production in North America except for the Honda Civic on Aug. 1, and Japanese production "is about 95 percent of normal," spokesman Ed Miller said. Deliveries to U.S. dealers are improving, he said.
Inventory sharply defined winners and losers in the marketplace in July. Winners had stock; losers didn't.
With a 72-day supply, Chrysler Group led major automakers with a 20 percent sales gain. At Ford Motor Co., which had a 54-day supply on Aug. 1, Lincoln sales jumped 40 percent, and Ford brand sales rose 13 percent. General Motors' sales rose 8 percent over July 2010 after it started the month with a 73-day supply.
"Whoever has the cars outsells everybody," said Ralph Martinez, owner of Town & Country Chrysler-Jeep-Dodge-Ram in Wilsonville, Ore., who credited a 50 percent July new-vehicle sales jump to being well-stocked.
"People are out there buying," Martinez said.
"They're going to places that have a good selection."
Bradford Wernle, Jamie LaReau and Mike Colias contributed to this report