A GM Turnaround Takes Shape in a Brutal Market. Will It Catch Ford?

"I think you have to see the [Detroit Three] exit China as soon as they possibly can. " -- John Murphy That was what the Bank of America Securities analyst said at his highly regarded presentation of "Car Wars. " The kicker is that this strong suggestion was made almost exactly a year ago, and the automotive market in China has only deteriorated further due to a lack of demand, excess duction capacity, and a brutal price war

Let's take a closer look

Hello and goodbye As China's market for new energy vehicles (NEVs) -- a category that includes full battery-electric, hybrid, and fuel cell electric vehicles -- expanded rapidly in recent years on the back of a blossoming domestic automaking industry focused on electric vehicles (EVs), foreign automakers were mostly left in the dust

That's a pretty steep slide in less than a decade

Instead of making a hard exit from China, though, GM went to work

GM focused on reducing inventory significantly, implementing effective cost-cutting measures, and imving its duct competitiveness in a market craving more NEVs

The results so far The early signs point to solid imvements from the Detroit automaker

That boost in sales should help GM toward its goal of becoming fitable in China for the year

While Ford has been a little less transparent how its China operations are faring since it largely stopped out financial data by region, it has managed pretty well

Ford's Mustang in China

Image source: Ford Motor Company

One thing investors have to remember is that a large part of Ford's China strategy now involves manufacturing vehicles there for export to other

One of its more important models in this strategy is the Lincoln Nautilus, which Ford exports from China to the U

That money-maker will face a little ding thanks to President Donald Trump's tariffs on automotive imports

The biggest thing to note for investors who have ed Ford or GM for even a few years is that China is no longer the mised land that many had hoped

At one point, analysts expected that China would become Detroit's second primary pillar of fits behind the lucrative North American market

If that has been part of your investment thesis for either GM or Ford, it's officially time to remove it

The kinds of sales and fits that Detroit automakers achieved in China roughly a decade ago are ly gone for good

Daniel Miller has positions in Ford Motor Company and General Motors

The Motley Fool recommends General Motors

The Motley Fool has a disclosure policy.