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As U.S. Sales Stall, Automakers Take Brands Overseas

A man walks outside a Chevrolet dealership in Beijing. American automotive companies are expanding, taking brands like Buick and Chevrolet overseas. (AP)

Car sales in the U.S. have stalled. Right now, GM sells more cars in China than it does here.

Around the world, American brands have a much higher "cool factor" than they do here at home. And U.S. car companies are looking to exploit that.

The future of the American car companies can be summed up in one acronym, BRIC: Brazil, Russia, India and China.

Michele Krebs, a senior analyst for the automotive website Edmunds.com, says these four countries have the fastest-growing markets in the world. They've also established manufacturing, and they're making money on commodities. That means they have money to burn.

"There's a young population that is coming into driving age. And there's a growing middle class in all of those countries that is making it possible to buy cars. That never existed before," she says.

That potential has not been lost on American carmakers. This week, they laid out their plans for the future.

General Motors presented its ideas at its annual shareholders meeting in Detroit — the first since the company recovered from bankruptcy.

"It really is a new GM and we have a new attitude," says CEO Dan Akerson.

In Brazil, Russia, India and China, GM is leading. "In the BRIC between now and 2015, [sales] volume will grow by 12 million units. That volume bodes well," Akerson says.

But, Krebs says, it's important to remember that the biases that many Americans have against GM and Ford carry over to other countries.

While GM was losing consumer confidence and market share in the U.S., it was planting its flag overseas with its Buick brand. Buick has "grown and grown," Krebs says.

And GM is looking to grow even more. The company will be launching a new brand aimed at young consumers who are pouring into China's cities to buy their first car.

Meanwhile, Ford won't be outdone. It says it wants to sell about 3 million more cars outside the U.S.

Ford plans to streamline itself and gain economies of scale all over the globe. The company announced Thursday that it's starting a new partnership in Russia, with a plant near St. Petersburg.

Gary Bradshaw, a portfolio manager with Hodges Capital Management in Dallas, says American automotive companies may have been knocked down a few notches in the U.S., but not internationally.

"Just remember that the rest of world, whether they're in China, Brazil or Pakistan ... they want to live just like us," Bradshaw says.

He's hoping that means they want two cars in the garage.

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Transcript

BLOCK: Car sales in the U.S. have stalled. Right now, GM sells more cars in China than it does in America. Around the world, the American brands have a much higher cool factor. For example, GM's Buick is a hip car in China and the U.S. car companies are looking to exploit that, as NPR's Sonari Glinton reports.

SONARI GLINTON: Let's talk about the future of the American car companies. I can sum that future up in a word: brick. Okay, actually BRIC as an acronym.

Ms. MICHELE KREBS (Senior Analyst, Edmunds.com): The B for the Brazil, R for Russia, I for India, C for China.

(Soundbite of laughter)

Ms. KREBS: Did I say okay or do you want me to say it again?

GLINTON: No, I think we got it. BRIC: Brazil, Russia, India and China.

Oh, and that's Michele Krebs. She's a senior analyst with Edmunds.com, the automotive website. She's going to help walk us through this.

So what's so important about Brazil, Russia, India and China?

Ms. KREBS: They're the fastest growing markets in the world.

GLINTON: They also have established manufacturing and they're making money on commodities. That means they have cash and...

Ms. KREBS: There's a young population that is coming into driving age. And there's a growing middle class in all of those countries that is making it possible to buy cars. That never existed before.

GLINTON: Well, that potential has not been lost on the American car makers. This week, they laid out their plans for the future. GM did it at its annual shareholders' meeting in Detroit. I should say its first year holders' meeting since GM came out of bankruptcy.

Here's Dan Akerson, the CEO of General Motors.

Mr. DAN AKERSON (CEO, General Motors): It really is the new GM and we have a new attitude.

GLINTON: I just need to point out that every single time Dan Akerson gets up in front of an audience he talks about the new GM. To be sure, the old GM was a dominant force globally and the new GM is no slouch either. In the BRIC countries - Brazil, Russia, India, China - GM is the leader.

Mr. AKERSON: In the BRIC countries, between now and 2015, that volume will grow by 12 million units. That bodes well for us in the future.

GLINTON: Michele Krebs, the analyst, says it's important to remember that the biases that many Americans have against GM and Ford don't carry over to other countries. When GM was losing consumer confidence and market share in the U.S., it was planting its flag overseas with, of all brands, Buick.

Ms. KREBS: People just shook their head and said that is just preposterous. It's a very harebrained idea. What are they doing? Looking back on that now, it was a stroke of genius because General Motors got in there early. They established a foothold and they have grown and grown.

GLINTON: And they want to grow more. GM will be launching a new brand, much less fancy than Buick, one that's really, really basic that's aimed at those young consumers who are pouring into the cities in China buying their first car.

Meanwhile, Ford won't be outdone. It says it wants to sell about three million more cars outside the U.S.

(Soundbite of TV ad)

Unidentified Man: (Foreign language spoken)

GLINTON: That's one of Ford's global commercials. It's part of Ford's plan to streamline itself and gain economies of scale all over the globe. Ford just announced yesterday that it's starting a new partnership in Russia, where the company will get a plant near St. Petersburg.

Gary Bradshaw is a portfolio manager with Hodges Capital Management in Dallas. He says the American companies may have been knocked down a few notches in the U.S., but in the rest of the world...

Mr. GARY BRADSHAW (Portfolio Manager, Hodges Capital Management): Just remember that the whole world is growing at a five percent GDP growth. Whether they are in India or China or Brazil or Pakistan, or wherever you want to say, they want to live like me and you.

GLINTON: Bradshaw says hopefully that means they want two cars in the garage. That, he says, is reason enough to bet on the U.S. car industry.

Sonari Glinton, NPR News, Detroit. Transcript provided by NPR, Copyright NPR.

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