Can the burgeoning strength of foreign auto markets revive Motown's mojo?
U.S. automakers are all about going global now, which is no surprise considering the difficulties they're facing at home. U.S. auto sales are slowing, and the finance business -- the industry's most profitable undertaking in the new millennium -- is taking a nosedive amid the credit crunch.
With these troubles at home, Detroit's Big Three have made some impressive strides in tapping the nascent growth of emerging consumer markets like China and Russia. But while foreign shores may well be Detroit's best hope now, it's a proposition that remains far from sure bet.
"There's no question that without their global presence, these companies would be in far worse shape than they're in now," says George Magliano, director of automotive industry research with Global Insight. "It's not clear that their business overseas could ever compensate for the trouble they're having in North America."General Motors' (GM - Get Report) North America division accounted for 64% of its $131.6 billion in global automotive sales for the first nine months of 2007. Its automotive business overall posted an adjusted operating profit of $1.3 billion for the period, despite a loss in North America of $482 million -- which was a big improvement over last year's loss of $1.6 billion. The profit hole in North America was filled by income of $607 million at GM's Asia Pacific division, which includes China and India; a $925 million profit from Latin America, the Middle East and Africa; and a $257 million profit from Europe.