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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) 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.

Ford's ( F) sales in North America comprised 46% of its total auto sales in the first nine months of 2007. It posted a loss of $1.5 billion from its automotive operations in North America for the period.

But Ford Europe -- including its Premier Auto Group, which is on the selling block -- had a $1.4 billion profit. The company's Asia Pacific and Africa division recorded earnings of $130 million.

Chrysler, which has been taken private by Cerberus Capital Management, garners just 8% of its vehicle sales from overseas, but observers say its new private-equity owners view opportunities abroad as its salvation.

In July, Chrysler signed a deal with China's largest independent automaker, Chery, which will make a line of small cars for sale under the Dodge brand. It's the first time a U.S. automaker has outsourced the production of an entire vehicle to a Chinese company.

Chrysler's Chery deal has yet to produce a vehicle, but a spokeswoman for the company said it has a number of other joint ventures in China. Its sales in that country were up 21% year to date at the end of November, at nearly 9,000 units, though that still represents a small portion of Chrysler's sales of 216,214 vehicles outside the U.S. for the period.

In Russia -- an auto market that's poised to grow 20% this year and surpass Germany as Europe's largest in 2011 -- Chrysler has no manufacturing presence, but it does have sales channels. Its sales there were up 36% for the year at the end of November, at 5,516 vehicles. Chrysler has a relationship with Gaz, the country's No. 2 automaker, and Chrysler execs have expressed an interest in expanding it.

GM, which is the No. 1 automaker in China, may get to Gaz first. It's currently exploring a deal to partner with the company, having recently lost out on a bid for a stake in Russia's No. 1 automaker, AvtoVaz, to Renault-Nissan -- the company that was in talks for a global alliance with GM last year. Billionaire investor Kirk Kerkorian liquidated his stake in GM after it declined to follow his advice and do a deal with Renault-Nissan.

GM is already the No. 1 non-Russian auto seller in the country, with its Chevrolet and Opel brands growing in popularity. It has a plant in St. Petersburg that will begin production next year, and it has a number of joint ventures and third-party manufacturing deals there, including a partnership with AvtoVaz, to build a small SUV called the Chevy Niva -- the top seller in its category.

GM said its sales in Russia soared by 75% in the third quarter compared to last year to 65,700 vehicles, and a spokesman confirmed that its operations in that country are profitable. Still, while its sales in Europe, which includes Russia, were up 10% to $26.8 billion in the first nine months of the year, its profits in the region on an adjusted basis declined by 27%.

"GM is investing a lot of money in these markets in order to expand and keep up with growth, but on the other side of the equation, they're selling small, inexpensive cars where the profit margin is going to be far less than that on, say, a Cadillac Escalade," says Erich Merkle, analyst with IRN.

A GM spokesman said well over half its sales in Russia are vehicles that cost less than $14,672. The average price for a vehicle in North America is around $28,000.

For its part, Ford has a smaller presence in Russia, with mainly a plant in St. Petersburg, but the company plans to invest $100 million in the country through 2009 to increase capacity to 125,000 cars a year. In China, Ford said it sales were up 27% for the first nine months of the year, and it recently opened a new manufacturing plant in Nanjing.

"These markets are about future opportunity," says Merkle. "As these consumers emerge and expand their middle class, they'll eventually start to move up market more in terms of the vehicle selection and the ability they will have to afford more expensive vehicles."

Merkle estimates auto markets like Russia's are still 10 to 15 years away from generating profit margins that are comparable to North America, so he says they should not be viewed as a viable alternative for the U.S. auto industry in the near term. The bulk of China's economic growth still comes from exports that go chiefly to the U.S., so if the U.S. goes into recession as a result of the housing downturn, overseas markets are likely to follow.

Competition is also heating up in these markets, where Asian-based automakers like Toyota ( TM), which is poised to overtake GM as the world's largest automaker, also have a big presence.

Meanwhile, markets like Russia and China have heightened geopolitical risks as a result of the heavy-handed government controls that still exist in their economies. Gaz, for instance, is owned by Russian tycoon Oleg Deripaska, an oligarch with close ties to Russian President Vladimir Putin, who controls the Russian media, jails political opponents and has rolled back democratic reforms in that country.

"These countries are just dabbling the free market these days," says Merkle. "You couldn't refer to Russia or China as democracies or real free market economies at this point in time. There are real risks there, but people are willing to take those risks if there's a big-enough payback down the road and hopefully trade can push them to open up more."

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