US Automakers' Overseas Business Continues to Shrink; Experts Warn Ford and General Motors Could Become Niche Manufacturers

Erik Gordon, a professor at the University of Michigan's Ross School of Business, stated that if Ford and General Motors lose significant market share in Canada, Mexico, and other countries where they once held dominant positions, they could gradually decline into niche manufacturers. Ultimately, the production and sales focus of these two companies would be confined to large pickup trucks and sport utility vehicles—categories that, while popular with many Americans, often see disappointing sales in most other parts of the world.

Gordon said, "The market future for American automakers is likely to shrink substantially to just the United States, and even then, only that portion of the domestic market that demands large SUVs and pickup trucks."

"Although electric vehicles are not yet mainstream, they will inevitably dominate the market in the future," stated Professor Gordon of the University of Michigan.

As tax credits for vehicle purchases and other clean energy incentives were phased out, both Ford and General Motors scaled back their electric vehicle development plans. According to estimates from Cox Automotive, despite the F-150 Lightning being the best-selling electric pickup truck in the U.S. last year, Ford still halted production of this model.

Plans by the Trump administration to relax emission standards have also prompted automakers to increase production and sales of more profitable gasoline-powered pickup trucks and SUVs. However, these models have seen poor sales in Asian and European countries where fuel prices are relatively high.

For years, the scale of overseas operations for American automakers has been shrinking. General Motors sold its European operations, Opel, to PSA in 2017, which later merged with Fiat Chrysler to form Stellantis. In the third quarter of this year, revenue from markets outside the U.S., Canada, and Mexico accounted for only 8% of General Motors' total.

Ford remains a mainstream automotive brand in a few countries such as the UK and Australia, but its market share in Europe has shrunk significantly. Data from the European Automobile Manufacturers' Association shows that Ford's market share in the EU fell from 5% in 2020 to 3% last year. Last year, Ford closed its factory in Saarlouis, Germany, a city adjacent to the French border.