updated 7:15 p.m. ET July 2, 2008

DETROIT - When consumers astonished the U.S. auto industry two months ago by quickly shunning trucks and going for gas mileage, the biggest beneficiary ended up being Honda Motor Co.

The No. 2 Japanese automaker, with the most fuel-efficient model lineup in the industry, never put both feet into the U.S. truck market, instead focusing on slow-but-steady growth with popular cars like the Civic and Accord.

It paid off in June. While its major competitors reported double-digit sales declines and burgeoning truck and sport utility vehicle inventories, Honda had a modest 1 percent sales increase. Its car sales were up almost 20 percent from the same month last year, and the Civic and Accord were among the industry’s top sellers.

"They are better positioned than anybody in terms of the products they have for this kind of environment," said Ron Harbour, a partner with the Oliver Wyman Group and author of a widely respected annual report on auto factory productivity.

But while Honda may look like it can peer into the future, the company's top U.S. executive says it is well-positioned for $4 per gallon gasoline because it always has emphasized small, fuel-efficient vehicles.

"We're not geniuses," John Mendel, the company's U.S. executive vice president, said Wednesday. "We're consistent."

Industry analysts say Honda has managed to avoid the sales crisis that has hit the Detroit Three and even Toyota Motor Corp. for two reasons. Although it makes SUVs and a small pickup, it has a strong lineup of cars that get good gas mileage. And its factories are so flexible that it can quickly make more of the vehicles that are in demand.

Honda sales gain while others' fall — The numbers: Honda Motor Co. sales were up a modest 1 percent in June, the only major automaker to show an increase. The Detroit Three, Toyota Motor Corp. and Nissan Motor Co. all reported double-digit declines, and the market dropped 18 percent overall. — The reason: Industry analysts say Honda has the right products — popular fuel-efficient models like the Fit, Civic and Accord. Plus it has factories that are so flexible they can build multiple models on the same assembly line. Honda says it built fewer Acura TL luxury cars, which aren't selling well, and instead shifted production at an Ohio factory to Accords. — The future: All automakers hope to have more small cars to meet demand because gas prices aren't expected to drop anytime soon. They're also scrambling to make factories more flexible to make multiple models.

"We can reprogram it to make it build more Civics," Mendel said. "That's by far one of our competitive advantages."

On the opposite end of the spectrum are the Detroit Three, most with too few small car models and each caught with well over half their factories building trucks at a time when the market has shifted to 56 percent cars and 44 percent trucks. GM and Chrysler have announced plans to close truck and minivan factories, and Ford is expected to announce specific cutbacks later this month.

Executives at all three wish they could flip a switch and convert factories from cars to trucks, but Greg Gardner, an analyst with the Oliver Wyman Group, says that's difficult and costly because cars require different tooling.

"In a perfect world, this would be great," says Erich Merkle, vice president of auto industry forecasting for the consulting company IRN Inc. in Grand Rapids. "Even Honda can't do that."

To go from trucks to cars, an automaker would have to replace the factory's machines for millions of dollars at a time when losses are mounting and they're burning up cash, Gardner said.

"Now we're in a situation where because of the cash burn rate, those kind of wholesale investments may be prohibitively expensive," Gardner said.

As a result, the Detroit Three could wind up with truck factories sitting idle while they max out the capacity at small-car plants, Gardner said.

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