Bipolar First Half of 2011 Finds Small Cars - And Trucks - Are Winners

Just the Facts:

• In an odd juxtaposition, the first half of 2011 was marked by the popularity of small cars — and trucks — as well as an epic earthquake in Japan that disrupted auto production and soaring gas prices in the U.S.
• The automotive trends in the first half of 2011 point to a continued recovery in the U.S. market, higher demand for fuel-efficient vehicles and more potential for market-share losses by Japanese brands still reeling from the March 11 quake, according to Edmunds.com.
• Consumers may see slight relief at the pump, with the U.S. Energy Information Administration predicting that the price for a gallon of unleaded gasoline will average $3.75 through September 30.

SANTA MONICA, California — In an odd juxtaposition, the first half of 2011 was marked by the popularity of small cars — and trucks — as well as an epic earthquake in Japan that disrupted auto production and soaring gas prices in the U.S., according to Edmunds.com.

Ford is a perfect illustration of an unlikely trend during the first six months of 2011. The Ford Fiesta and Ford Focus small cars flew out of showrooms, making up 40 percent of Ford's U.S. sales growth over a year earlier. But at the same time, Ford F-Series truck sales were robust. With almost 50,000 units moved in June, the F Series experienced one of its highest-sales months in three years.

The automotive trends in the first half of 2011 point to a continued recovery in the U.S. market, higher demand for fuel-efficient vehicles and more potential for market-share losses by Japanese brands still reeling from the March 11 quake, according to Edmunds.com.

"It was really hard to draw a bead on the underlying trends in the market because of all these huge surprises that really dictated what went on from month to month," said Jessica Caldwell, the senior U.S. industry analyst for Edmunds.com. "And where we ended up at the end of June was pretty much where we began in January; with a market in definite recover mode, though not a strong one; higher demand for fuel-efficient vehicles; and more potential for market-share losses by Japanese brands, and gains against them by their rivals, than ever before."

In the next six months, consumers may see a slight easing of pump prices, according to the U.S. Energy Information Administration, which notes that "gasoline prices have been falling."

It forecasts that the regular-grade motor gasoline retail price will average $3.75 per gallon during this summer's driving season — from April 1 through September 30 — up from $2.76 per gallon last summer, but 6 cents per gallon lower than last month's projections.

Edmunds.com notes that consumers probably won't see "bargain-basement type prices" in showrooms anytime soon.

Incentives all but disappeared on small cars by the second quarter, and transaction prices rose significantly.

Incentives in June averaged $2,100 for the third consecutive month, according to Edmunds.com's proprietary True Cost of Incentives formula. It notes that every OEM's incentives averaged below $3,000 a unit.

Inside Line says: Reading the automotive tea leaves for the rest of the year is challenging, given the once-in-a-lifetime events of the first half, such as Japan's monster quake.