It is not enough that two-thirds of The Big Three have gone through bankruptcy and that GM is controlled by the Treasury Department. Detroit has to contend with the more adroit and well-funded major car companies from Japan. Toyota (TM) has a chance to take the first place in auto market share in America in 2010, and Honda (HMC) is not terribly far behind it.

European car companies have not done as well as the Asians in the US market.

Mercedes and BMW sales are limited by the price points of their cars. Saab, Volvo, Jaguar, and Rover were all part of US companies  and did no better than their parents. Fiat and VW were chased out of the American market years ago.

VW covets the US business that the Japanese have. It is the largest car company in Europe and has a wide range of models that can match any of its global peers. Now, it looks like it will improve its arsenal by buying a large piece of Porsche, gaining de facto control of the smaller firm.

VW has lacked a luxury brand to help it push back into the US market. It has not had a credible competitor for Cadillac, Lincoln, Lexus, or Mercedes. That is about to change.

Detroit’s bad dreams are about to get worse.

Douglas A. McIntyre

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