Detroit might actually be a desert of steel and and concrete if not for emerging markets.
Well, that's not entirely true.
Thanks to Asia and Brazil, the median annual total shareholder return for automakers from 2009 to 2013 was 29%. Granted, that's coming up from a disastrous 2008 when General Motors briefly become Government Motors. But the automakers weren't the only industry requiring government bailouts. Banks needed a helping hand from Washington too. But when compared to 26 other global industries, automakers shareholder return is 8 percentage points higher, the
Rising incomes in the emerging markets saved GM as much as the Obama bailout did. Companies like Ford, Toyota and Honda also have developing countries to thank.
The Boston Consulting Group said that the foreign-based original equipment manufacturers, or OEMs in industry parlance, produced an annual median total shareholder return ranging from 36% to 49%. Meanwhile, the automakers that focused more on developed markets posted lower returns of 23% to 35% on the high end.
Stretched out over a five year period, emerging market based car makers dominate the growth story. China is in the lead, of course, with rising incomes and 1.4 billion inhabitants.
The 28-page report noted that restructuring and M&A have also led to growth.
Tata Motors of India acquired Land Rover and Jaguar from Ford back in 2008. Italy's Fiat acquired Chrysler at a fire sale, keeping that brand alive and helping Fiat penetrate the U.S. market for small, city vehicles like its Fiat 500. Meanwhile, General Motors and Ford slimmed down by dumping nameplates that were not helping the bottom line. Besides Jaguar and Land Rover, Ford also sold Volvo to China. General Motors discontinued brands entirely, like Saturn, Oldsmobile and Pontiac.
The report says automakers must make "product innovation a priority". Restructuring and acquiring brands is not going to help with growth in the future as it did immediately post-crisis in 2008.
"Some industry players will need to undertake a broad restructuring of their value propositions...product portfolio, finances and governance to spur the growth-propelled innovation needed to serve a global marketplace in constant flux," the report authors wrote.
Shareholder Value Creators
A look at the car companies that returned the most to their shareholders between 2009 and 2013 thanks to rising sales and dividend programs. Passenger vehicle makers only. Ranked in descending order. China dominates top 3 positions.
Mahindra & Mahindra -- India
Kia Motors -- South Korea
Tata Motors -- India
Fuji -- Japan
Changan -- China
Brilliance -- China
Great Wall -- China
Sources: Thomson Reuteres Datastream; Thomson Reuters Worldscope; Bloomberg; corporate annual reports; Boston Consulting Group analysis.