The American automobile industry did not adapt quickly enough to competition from foreign car makers and went through a huge decline, I think after several years of reorganization the American car industry can once again ring dominate in the United States, I think that automobile manufactures will always be a stable of the American economy.
I believe the American automobile industry will recover and I would say that they already have. The real problem for American automobiles is the change in competition. These changes are real and they've taken part of the market over and it's unlikely that will change. American auto makers will have to deal with lower sales for the foreseeable future.
The U.S. car industry suffered because a lot of people began to see that Japanese models were often more reliable and of better quality. The U.S. car industry can gain a better standing in the eyes of Americans by producing high quality cars that they stand behind. They can also try to be innovative and come up with new features. It's possible for them to recover, but they do need to prove that U.S. cars are just as reliable and affordable as foreign made options.
The American auto industry can recover if it works on providing high quality products at a good price. The American auto industry provides jobs to the American people, so there is reason for people to want to buy from them. They have to challenge the big competition such as Honda and Toyota more.
Living here in Germany I have to say, the image we have here of American cars is not very charming.
Bad workmanship, outdated techonolgic features, high costs and especially bad engines when it comes to gas saving.
While the American Oldtimers have a fashionable outside, most people don't like the design of newer ones.
Most cars driven in Europe are much smaller, cheaper, lighter and with this have a smaller engine.
While the everage engine here is about 1.6 liters, or a 1.4 with a turbo - also i see cars from 1 to 2 liters, over 2.2 is unusual - most engines american manufactures offer are bigger, and even the tinier one need a lot of gas.
While our vw golf plus (google it) needs about 8 liter/100km the chevrolet with the same sizes and also a 1.6 liter motor needed around 11 and was still less agile.
With gas prices around 1.60 euros per liter (around 6 dollars per gallon) you can't sell these cars overseas - anywhere out of america basicly. And these are important markets, you can't limit a company to one continent nowadays.
Even if you had the money to drive such a car you wouldn't do it here - 'cause of the waste of gas.
I think that American cars are simply too far behind to bounce back completely. They also now have a reputation of being cars that break down easily and do not last long. On top of being horrible on gas, and having to compete with more luxurious and well made cars from Europe and Asia, it will not recover.