Foreign automakers to outbuild Detroit in North America: study

DETROIT Mon Jun 22, 2009 10:55am EDT

DETROIT (Reuters) - European and Asian automakers are expected to build more vehicles in North America than Detroit's three automakers by 2012 following a sweeping restructuring of the domestic industry, according to a study released on Monday.

General Motors Corp GMGMQ.PK, Ford Motor Co (F.N) and Chrysler Group LLC are expected to reduce assembly capacity in North America by more than 4 million units, or 35 percent, to 7.5 million units by 2012, according to the study released by industry restructuring advisory Grant Thornton.

In the same period, all other automakers combined -- including Volkswagen (VOWG.DE), Toyota Motor Corp (7203.T) and Hyundai Motor Co (005380.KS) -- will increase capacity about 20 percent to more than 8 million units, Grant Thornton said.

The Detroit-based automakers are slashing production and closing plants to align with weaker demand.

Chrysler emerged from Chapter 11 bankruptcy proceedings this month by completing a sale to a group led by Italy's Fiat (FIA.MI). GM filed for bankruptcy on June 1 and hopes to complete a sale process to a new company led by the U.S. Treasury by the end of August.

"A new order is emerging where the Detroit automakers may no longer be the volume leaders in their home market," said Kimberly Rodriguez, who leads Grant Thornton's global automotive practice.

The dramatic restructurings of the Detroit automakers also mean that North American parts suppliers will need to bolster balance sheets, seek key product lines or technologies by acquisitions and secure more business from European and Asian automakers, Rodriguez added.

(Reporting by Soyoung Kim, Editing by Maureen Bavdek)

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