SANTA MONICA, Calif. —  Edmunds.com’s July 2011 U.S. automotive sales forecast indicates that Toyota is on the right track to recovery from the productions struggles caused by the March 11 earthquake in Japan. The automaker is expected to end the month with 134,480 units sold in July, a 21.2 percent month-over-month sales gain.

Edmunds.com anticipates that Toyota’s gains will be exceeded only by Nissan, which is expected to see a 27.8 percent month-over-month gain. Toyota’s sales increase will translate into a large increase in the company’s market share, which the auto research Website projects will improve 2.1 percentage points on a month-over-month basis to 12.6 percent.

“Inventory issues are not seriously holding back Toyota anymore, and a 25 percent month-over-month boost in incentives are helping the company finally pick up the sales momentum that it needed,” said Jessica Caldwell, senior analyst at Edmunds.com. “But with sales expected to be off more than 20 percent compared to July 2010, Toyota still has a long way to go.”

Honda, which also is recovering from the earthquake, is expected to sell 2.4 percent fewer vehicles this month than in June. Its market share also is expected to slide another 0.3 percentage points from the same period last year.

Chrysler and Ford are both expected to lose an estimated 1.4 percentage points in market share, while GM is expected to drop just 0.1 point, according to the forecast. Chrysler will experience the largest drop in month-to-month sales, as it is expected to sell 10.9 percent less vehicles than it did in June.

New-car sales are estimated to reach 1,066,102 units this month, a 1.6 percent increase over July 2010 and a 1.3 percent increase over June. The estimated sales volume translates to a seasonally adjusted annualized rate (SAAR) of 12.3 million light vehicles, nearly one million more than the 11.4 million SAAR reported in June, according to Edmunds.com.

Retail SAAR was 9.1 million in June and is expected to reach 10.3 million in July, an increase of about 13 percent. Edmunds.com projects that fleet sales will account for 16.5 percent of all sales in July.

“Prices are falling as dealer inventories are becoming more stable, so this boost in sales over last month was expected, and it is encouraging news for the auto industry,” said lace Plache, Edmunds.com chief economist. “But some pricing and supply issues are still restraining market growth and there is also an underlying question of whether there are larger economic issues at play. Exactly how consumers react to next month’s summer sales events will go a long way toward answering that question.”